M I N I S T E R I O D E D E F E N S A

2002/2003 STRATEGICPANORAMA

February 2003

INSTITUTO ESPAÑOL DE ESTUDIOS ESTRATÉGICOS

Edita:

NIPO: 076-03-048-4ISBN: 84-7823-986-3

Depósito Legal: M-15046-2003

Imprime: Imprenta Ministerio de Defensa

Tirada: 1.100 ejemplaresFecha de edición: Marzo, 2003

FICHA CATALOGRÁFICA DEL CENTRO DEPUBLICACIONES

2002/2003 Strategic Panorama / Instituto Español deEstudios Estratégicos. — [Madrid] : Ministerio de Defensa,Secretaría General Técnica, 2003.— 226 p. ; 24 cm.NIPO 076-03-048-4.— D.L. M-15046-2003ISBN 84-7823-986-3I. Instiituto Español de Estudios Estratégicos II. España.Ministerio de Defensa. Secretaría General Técnica, ed.

Relaciones internacionales / Seguridad internacional /Política exterior / Estudios estratégicos / Conferencias /Convención Europea / Unión Europea / Ásia / África /Iberoamérica / Estados Unidos / Europa Central / EuropaOriental / Países bálticos / Países mediterráneos / Rusia /España / Bruselas / Barcelona / Sevilla / 2002

GENERAL SECRETARIAT DIRECTORATE GENERAL FOROF DEFENCE POLICY INSTITUTIONAL DEFENCE RELATIONS

Spanish Institute for Strategic Studies

Working Group no. 5/02

2002/2003 STRATEGIC PANORAMA

The ideas contained herein are the responsibility of the authors and do not necessarilyreflect the opinion of the IEEE, which has sponsored this publication.

LETTER FROM THE DIRECTOR

In November 2002 I was appointed Director of the Spanish Institute forStrategic Studies (IEEE), which is attached to the Directorate-General forInstitutional Defence Relations. Logically, I am more than proud to holdthis position.

In the past few years, as part of its Strategy series, our IEEE has pub-lished several editions of the Strategic Panorama with the collaboration ofpersonnel from the Institute and highly qualified contributors.

However, I believe the time has come to embark on a new stage in thelife of the Panorama by modifying both its external appearance and theway it is written.

In order to perform this task, this year we are going to be working inconjunction with the Elcano Royal Institute of International and StrategicStudies which, although established only recently, already enjoys conside-rable prestige in the field of strategic research and analysis. I believe thatthis change of direction and valuable new contribution will add to the inte-rest of this publication and increase its dissemination among the Spanishand foreign media, institutions and organisations specialising in thesefields.

Finally, I would like to express my heartfelt thanks to all the people whohave collaborated efficiently with us over the past few years; their effortand dedication have made this Strategic Panorama a successful publica-tion of acknowledged repute both in Spain and abroad.

JAIME RODRÍGUEZ-TOUBES NUÑEZ

Director of the Spanish Institute for Strategic Studies

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CONTENTS

INTRODUCTIONBy Javier Pardo de Santayana y Coloma

Chapter IA STRATEGIC OVERVIEW OF 2002/2003By Ramón Armengod López

Chapter IITHE BUILDING OF EUROPEBy Javier Pardo de Santayana y Coloma

Chapter IIICENTRAL AND EASTERN EUROPE AND EURASIABy María Angustias Caracuel Raya

Chapter IVTHE MEDITERRANEANBy María Dolores Algora Weber

Chapter VIBERO-AMERICABy Marcelino Dueñas Fontán

Chapter VIAFRICABy Alejandro Cuerda Ortega

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Chapter VIIASIABy Fernando Delage Carretero

EPILOGUE

COMPOSITION OF THE WORKING GROUP

INDEX

INTRODUCTION

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INTRODUCTION

The year 2002 began amid the aftermath of September the Eleventh,which made security the centrepiece of world policy, and ended with thequestion of Iraq and North Korea's challenge. The United States, poisedfor war against terrorism, asserted its status as the world's only majorpower and showed little interest in European support. Precisely whenAmerica was expected to encourage widespread mobilisation to addressthe major problems of substance, its attitude towards the economic situa-tion and certain international judicial and social initiatives proved some-what disappointing and caused its image as a leader nation to deteriorateconsiderably. However, the NATO summit at the end of the year saw a veryencouraging reversal of this trend, when the United States proved willingto team up again with its European partners to take collective action fol-lowing the decision to create a rapid response force for combating terro-rism. At this summit the Atlantic Alliance went from being an organisationfor European defence to an organisation for global security.

Landmark events of 2002 were the decisions to enlarge the AtlanticAlliance and the European Union. Moscow accepted them, even though inboth cases this involves incorporating the Baltic states, whose possibleaccession to NATO the Russian government had always opposed.

Another significant event was the United Nations Security Council'sunanimous agreement regarding Iraq. In the past, the effectiveness of itsresolutions had often been undermined by the repeated conflicts of inte-rests within this organisation and the powers' use of the right of veto.

Relations between Europe and the United States made very construc-tive headway in an atmosphere of good understanding. In China, the poli-tical repercussions of the opening up of the economy began to be institu-tionalised, while Japan's flagging economy relegated the country to a

minor role in the political arena. India and Pakistan, for their part, had theinternational community on tenterhooks with repeated clashes that in theend did not come to anything.

The consolidation of the new Afghan regime was put to gruelling teststhat revealed its fragility. Saudi Arabia finally authorised the use of its basesin the event of military action against Iraq, but was torn between its con-tradictions, which make an eventual change of regime in that country amore interesting prospect. America seems to believe such a change wouldhave favourable repercussions in the Middle East and on the Palestinian-Israeli conflict, which developed into a spiralling violence that will be verydifficult to stem.

Terrorism continued to rear its ugly head on several occasions, thoughnever to the extent of September 11th. The main concern was that thisthreat would be combined with that of the proliferation of weapons of massdestruction. Europe progressed in developing effective systems andmechanisms—particularly in the police and judicial spheres—to keep atbay these and other threats, which, like organised crime and drug traf-ficking, thrive on factors such as immigration and the forthcoming en-largement of the European Union.

As for the building of Europe, the year began with the permanent adop-tion of the euro, which marked the completion of the first stage in this pro-cess, economic and monetary union, and with the work of the Conventionthat is entrusted with the task of mapping out Europe's future and prepa-ring the Union to cope with enlargement without any major loss of cohe-sion or efficiency.

The fact that the Atlantic Alliance has now overstepped the bounds ithad imposed on itself and extended its scope to anywhere in the worldmerely confirms the appropriateness of last year's decision to broaden thegeographical area covered by the Strategic Panorama to the whole of Asia,in keeping with the Spanish government's interest in that vast area of theworld. While the broadening of the Atlantic Alliance's scope of actionundoubtedly reinforces America's supremacy, it also requires Europe tomake a supplementary effort that doubly justifies our editorial endeavour.

THE CO-ORDINATOR OF THE WORKING GROUP

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CHAPTER ONE

A STRATEGIC OVERVIEW OF 2002/2003

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A STRATEGIC OVERVIEW OF 2002/2003

By Ramón Armengod López

INTRODUCTION

In September President George Bush Jr unveiled a document thatwill go down in 21st-century history: the US “National Security Strategy”.Its chapters on America's international strategy constitute a programmefor shaping a new international order that looks more set to become areality than the “new order” championed by his father, President Bush Sr,in 1991.

Like most of the US president's declarations, it conveys a sense ofself-assertion and absoluteness—an imperial proclamation and a gene-rous and pressing appeal to other peoples and powers of this world thatdoes not fail to impress, regardless of whether or not one actually agreeswith it.

"The great struggles of the twentieth century between liberty andtotalitarianism ended with a decisive victory for the forces of freedom—and a single sustainable model for national success: freedom, demo-cracy, and free enterprise", precisely America's success and values."Today, the United States enjoys a position of unparalleled militarystrength and great economic and political influence", which it uses toestablish "Pax Americana": "We will defend the peace by fighting terro-rists and tyrants".

The international strategic outlook is therefore synonymous withAmerica's National Security.

AMERICA'S GREATNESS

In March 1999, in an article entitled "The solitary superpower",Professor Huntingdon stated that Washington did not realise the antipathyit was provoking. President Clinton took up Huntingdon's recommenda-tions (less arrogance and more co-operation) on how to counteract theenvy, incomprehension and rejection that the imperial democracy arouses.

The Italian ambassador and professor Sergio Romano points out in abrilliant article that the new-style imperial power has lived the hundredyears of the 20th century dangerously, showing three facets—as a hege-monic power, champion of liberal democracy and a social and economicmodel based on modernisation, progress, technological innovation, freetrade and market laws—and concludes that America's intense materialismis at the same time an idealism that drives it towards greatness, and thatthis greatness is inseparable from both.

Another of America's characteristic features is the "frontier spirit" withwhich everything is sacrificed for the sake of new goals: in this case thenew frontier is information technology (Internet "made in the US"), the basisof the third industrial revolution, which is not only modifying the productiveprocess but also changing people's way of thinking and behaviour, whilegiving rise to unprecedented growth in the history of capitalism, shapingboth the structure and the ideology of societies. Therefore globalisation andAmericanisation of the world go hand in hand, as does rejection of them.

In this connection, former Italian President Francesco Cossiga statesthat America's hegemony is maintained by its military power and by aneducational system that is unique in the world. He points out that leadersall over the world are being shaped at American universities and thatAmerica has established an intellectual and political leadership, given thelack of alternative ideas and programmes in other countries, whetherdeveloped or developing.

The rest of the world, then, copies the American model, an economy-based model, in some way or another. Paradoxically, the West has defea-ted the materialistic understanding of history, Marxism, precisely when itis confirming it in practice.

Economic factors determine political factors, particularly overseas, asopposed to vice versa. Geoeconomics has supplanted geopolitics andgreater importance is attached to conquering economic areas than geo-

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graphical regions. In the current power relations of the world market, it isdifficult to escape the United States' supremacy.

The economy is, therefore, the cornerstone of the system: it is neitherethics nor politics but the economy which now governs internal or inter-national society, because it is believed that, merely by respecting its rules,we may achieve what is regarded as the common good and ultimate goalof a democracy: the highest possible degree of well-being in such a quan-tity as to be able to distribute it widely.

These principles give rise to conflicts between the United States andthe peripheral areas of the world. America is imitated because it offers therest of the world ideas and advantages, but it is also envied for its powerand well-being. Its power stems from American hegemony, and its advan-tages spark political and cultural reactions, sometimes of a religious kind;and both factors encourage different forms of terrorism, for the combina-tion of irritation and envy varies from region to region.

The identification between Americanisation and globalisation further-more leads the United States to be blamed for the strengths and weak-nesses of the system, for the growth of wealth or poverty, and for much ofthe world's inequality and marginalisation. And yet, as great experts say,"today the world needs America more than ever".

But an America that would do well to listen to Pope John Paul II, whoseapostolic exhortation Ecclesia in America points out that globalisation cannotbut be negative if it is "ruled merely by the laws of the market applied to suitthe powerful", such as "the absolutising of the economy". In this case theresults are "unemployment, the reduction and deterioration of public servi-ces, the destruction of the environment and natural resources, the growingdistance between rich and poor, unfair competition (owing to the protectio-nism of the rich), which puts the poor nations in a situation of ever increasinginferiority". The Pope calls for "an economic order dominated not only by theprofit motive" and an authentic "globalised culture of solidarity", and, amongother things, denounces the corruption and "cultural globalisation producedby the power of the media", which often impose materialistic values.

Consequences of 11 September 2001

The events of 11 September 2001 prompted America to dispel anydoubts it might have had about how to exercise its leadership: the savage

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attack on symbols of its power and the revelation of the vulnerability of theempire to the whole of the world forced it to rethink almost everything, tohastily make changes that would otherwise have been gradual and, as faras possible, agreed upon internationally.

As Ambassador Richard N. Haass, Director of Policy Planning at theDepartment of State, pointed out at the annual conference of theInternational Institute for Strategic Studies, "September 11th has shapedhow the United States conducts itself in both the domestic and internatio-nal arenas. And there is no doubt that the US response to September 11this still evolving", for there are lessons to be learned from 11 September2001 that Washington has yet to incorporate into its mindset.

One of the first conclusions is the need to re-examine globalisation inthe light of terrorism: "globalisation itself is not inherently good or evil. It isa description of the state of the world and a dynamic, evolving processthat creates new vulnerabilities along with new opportunities", and leadsto multilateral responses to transnational problems. Therefore, "no matterhow powerful the US, without partners it cannot easily and efficientlytackle problems that transcend borders". Nor, simply in the name of coun-terterrorism, should America avert its eyes from unpleasant realities "as wedid on occasions during the Cold War in the name of anti-communism".That is, it cannot overlook the need to promote political and economicreforms in that outside world, which was once an ally against Marxism andnow harbours the threat of terrorism.

Washington should also re-examine its international relations as awhole, basing its conclusions on new factors such as, for example, thecurrent attitudes of Russia and China. Finally, the strategy for guaranteeingnational security must necessarily be international, with a defence systemthat is not limited, as it has been so far, to external threats. In addition, thisnew strategy must not cause the United States to turn its back on theworld, and collective security must not impinge on individual rights.

These thoughts, entertained by someone so close to the Secretary ofState Colin Powell, may offset the declarations made by the other sectorof the American administration, the hardliners, and even put the presi-dent's own statements into perspective (we should not forget that they areaddressed "urbi et orbe", that is, first to his own voters and secondly toAmerica's worldwide friends and enemies) by helping distinguish presi-dential rhetoric for domestic consumption from the declarations of princi-ples and of how it intends to deter adversaries and persuade allies.

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This year, 2002, the US administration has outlined a set of courses,principles or rules of action—the "Bush Doctrine"—which also establishnew conditions for the options and prospects of other countries, whetheror not they are powers.

The document quoted in the introduction to this chapter of thePanorama, the US's national security manifesto, sums up Washington'sanalyses, intentions and public commitments since 11 September 2001.These are based on America's conviction that the major powers of thisworld are on its side against terrorism, which allows it "to extend the bene-fits of freedom across the globe" and translate "this time of opportunity forAmerica" into "decades of peace, prosperity and liberty". The UnitedStates takes upon itself to "champion aspirations for human dignity", forwhich it will draw from its experience: "America is not just a stronger, butis a freer and more just society". It can therefore strengthen alliances todefeat terrorism and is furthermore a nation that is "peaceful, but fiercewhen stirred to anger" and whose responsibility to history is "to rid theworld of evil", for "we build a world of justice, or we will live in a world ofcoercion".

At this point President Bush slips in a paragraph that deserves our fullattention: "No doctrine can anticipate every circumstance in which USaction—direct or indirect—is warranted." However, there are some strate-gic principles for this: "building international relationships and institutionsthat can help manage local crises when they emerge"; and "the UnitedStates should be realistic about its ability to help those who are unwillingor unready to help themselves". He goes on to discuss the Israeli-Palestinian conflict and ends by concentrating on "rogue states" that "bru-talise their own people and squander their national resources for the per-sonal gain of the rulers; display no regard for international law, threatentheir neighbours, and callously violate international treaties to which theyare party; are determined to acquire weapons of mass destruction (...) toachieve the aggressive designs of these regimes; sponsor terrorismaround the globe; and reject basic human values and hate the UnitedStates and everything for which it stands"—no doubt a portrait of the Iraqiregime...

The document goes on to state that America must defend against thethreat of weapons of mass destruction through proactive counterprolifera-tion efforts. Although weapons of mass destruction were a last resortduring the Cold War, "today, our enemies see weapons of mass destruc-

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tion as weapons of choice" and therefore, if threatened, the United Stateswill not rely on a reactive posture because "the magnitude of potentialharm [does not] permit that option. We cannot let our enemies strike first".

"For centuries, international law recognised that nations need not suf-fer an attack before they can lawfully take action to defend themselvesagainst forces that present an imminent danger of attack"; moreover, it isnecessary to adapt "the concept of imminent threat to the capabilities andobjectives of today's adversaries" whose targets are not only military for-ces but also the civilian population. Accordingly, "to forestall or preventsuch hostile acts by our adversaries, the United States will, if necessary,act preemptively".

The US president adds that "nor should nations use preemption as apretext for aggression", which the reader might find rather perplexing werethe paragraph not to end by stating that the reasons for US actions (inclu-ding preemptive action, naturally) "will be clear, the force measured, andthe cause just..."

Other parts of the address define non-military objectives: "global eco-nomic growth through free markets and free trade" and to "expand the cir-cle of development by opening societies and building the infrastructure ofdemocracy".

This is followed by an extensive review of Washington's relations withother main centres of global power, starting with Europe and NATO (sum-ming up the results of the Prague Summit), the Asia-Pacific region (inclu-ding Japan, Russia, India and China) and the prospects that deserve USsupport.

The important document ends with the plan to transform America'snational security institutions, which is worldwide in scope, since, in order todefend the country, its military "must assure our allies and friends; dissua-de future military competition (...) and decisively defeat any adversary ifdeterrence fails". Defence and security are therefore one of the same thing.

Given the global nature of the war on terrorism, "the United States willrequire bases and stations within and beyond Western Europe andNortheast Asia, as well as temporary access arrangements for the long-distance deployment of US forces".

"We know from history that deterrence can fail; and we know fromexperience that some enemies cannot be deterred".

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It then expands on intelligence services, public information and diplo-macy, specifically mentioning the effort to help people around the worldunderstand America's intentions and win "the struggle of ideas", citing theinteresting example that "the war on terrorism is not a clash of civilisations;it does, however, reveal the clash inside a civilisation, a battle for the fu-ture of the Muslim world".

The document ends with the statement that "today, the distinction be-tween domestic and foreign affairs is diminishing", meaning the end ofsplendid isolation and the confirmation of the Americanisation of theworld, and a paragraph asserting unilateralism: "In exercising our leader-ship, we will respect the values, judgment, and interests of our friends andpartners. Still, we will be prepared to act apart when our interests andunique responsibilities require".

We must no doubt thank President Bush Jr. for his clear definition ofthese objectives, which show that the national security of the imperialdemocracy has become an international strategy.

RELATIONS BETWEEN EUROPE AND THE US IN 2002

During 2002 "transatlantic relations" were intense but not always har-monious. As General Pardo de Santayana states, "as 2002 progressed, itbecame clear that the Americans were tending towards unilateral actionand were willing even to disregard their partners and friends. The hopes ofwitnessing a joint action of the reasonable countries vis-à-vis the majorproblems of substance accordingly waned and such action was left in thehands of the Americans, who lost their chance to benefit from the well-meaning contributions of the Europeans".

Washington's preparations for taking military action against the Iraqi regi-me gave rise to another debate between the United States and its Europeanallies, who denounced America's tendency towards unilateralism within theUN and its impatience vis-à-vis European positions, while "the Americansrightly criticised Europe's unwillingness to assume the burden of security".

The two sides of the Atlantic continue to disagree over all the majorworld issues: ecology (America's refusal to sign the Kyoto protocol), deve-lopment co-operation and combating famine and disease (Johannesburg"Earth Summit"), rejection of the jurisdiction of the International CriminalCourt and economic protectionism for its own productive sectors as

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opposed to the liberalisation required by the global market, among others."America's attitude to these affairs undermined the credibility and moralauthority of Washington's leadership, as it was interpreted as lack of sen-sitivity towards some of the major problems that affect the whole of man-kind" (Pardo de Santayana): in 2002 the American administration gavepriority to its interests and its own private jurisdiction over world solidarity,that is, it showed a tendency to use its power, not only to guarantee a neworder, but to include its hegemonic privileges.

In actual fact, what is being debated is Europe's role in this world ba-lance or imbalance that has been accentuated by the attacks of 11September 2001—that is, a reassessment of its relations with the imperialdemocracy, with which it nonetheless shares common values and a history.

Now that isolationism—to which the newly elected President Bush Jrstill appeared to be inclined in 2000—has become a spent tradition, inter-ventionism is the only philosophy that remains, endorsed by PresidentBush's aforementioned "National Security Strategy" of 2002. It will beimplemented unilaterally or multilaterally, depending on the occasion, thedevelopment of the new order, the politico-economic and ideological guide-lines on which the successive US administrations are based, the degree ofadaptation of international legality to the new power balance, the measureof success of globalisation (economic, technological, cultural, etc....), theresults of the "security strategy" and the military interventions it involves,and the emergence of new regional or global rival powers, etc.

The debate should therefore be steered away from the dichotomy be-tween unilateralism and multilateralism and focus on Europe's world rolein globalisation: what it should be in future, the resources and will requi-red, and the trickier question of what Europe's undisputed contribution willbe to this international order that is being shaped and is centering onAmerican hegemony. In other words, how could Europe complement andbalance the imperial democracy and be its active partner, precisely in theuniversal application of democratic values?

Contrasting mutual perceptions

Recently—though this trend was witnessed before 11 September2001—the traditional divergence between Europe and America as to theirrespective roles has been widening as a result not only of rival interestsbut also of their different perceptions of shared worldwide risks. These

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differences are particularly marked with respect to their assessment ofthe situation in the Muslim Arab world (Europe's southern frontier andAmerica's priority objective owing to its special relationship with Israel),the treatment of other civilisations and, lastly, their different attitudes tothe international legal framework painstakingly created in the 20th cen-tury, with all its loopholes and imperfections, and partly superseded bythe disappearance of bipolarity and the impact of globalisation.

This divergence, and a certain amount of agitation, have arisen fromeach side's negative perceptions of each other. In the case of theEuropean Union, this is fuelled by fears about the direction Washington isdrifting in and by the effects on the socio-economic model of globalisa-tion, which is identified with Americanisation, and its transformation intoan absolute value out of historical necessity. And in America, this percep-tion springs from the neo-conservative school of thought based on a con-cept of democracy and economy that puts the related political and ethicalissues on ice when progress so requires, certain of the need to impose it,if necessary by force. Only America has this power, which is at the serviceof the "manifest destiny" of such a great and virtuous people who embodymankind's ultimate and best possibilities.

Following the perverse attacks of 11 September 2001, these ideologicalsuppositions upheld by Christian and Jewish economic and fundamentalistoligarchies have come out with such theories, which were shaped progres-sively throughout the nineties. Professor Robert Kagan, whose shares thisideology, points out that this divergence of perceptions is due to:

— The huge change in the power relations between the United Statesand the European Union following the Second World War, whichheightened during the nineties and has now come to a head.

As General Pardo de Santayana points out, "the spectacular in-crease in the American defence budget dashed Europe's hopes ofclosing the gap in military capabilities, even partially".

In Kagan's view, Europe is moving into "a self-contained world oflaws and rules and transnational negotiation", where strength doesnot matter, "where unilateral action by powerful nations is forbid-den, where all nations regardless of their strength have equal rightsand are equally protected by commonly agreed-upon internationalrules of behaviour", whereas the United States does not fear a realworld based on widespread struggle and power politics.

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— Europe's attitude springs from the negative experiences of pastconflicts and from American protection during the "Cold War". Thishas enabled it to become established as a peaceful area: its collec-tive security was guaranteed from outside, through NATO.Therefore Europe is an economic success, a developing politicalreality with an anaemic foreign policy and, according to the AtlanticAlliance's Secretary-General, Lord Robertson, "a military pygmy"that lacks the determination to do anything about it.

— Europe accordingly believes that its mission is to share with theworld its experience of negotiation and peace, whereas Americalacks this experience: in the 20th century, only its might enableddemocracy to triumph over Communism.

— However, Europe must develop its military capabilities in accord-ance with America, whose strength it needs just as much or morethan before.

The United States, for its part, should take more care "to showwhat the founders called a 'decent respect for the opinion of man-kind'".

In Europe this disparity (aside from the partial and systematicattacks of the anti-globalisation groups, of the remnants ofMarxism and third-worldism and also of certain historical grudgesof the nationalist right-wing forces) is expressed in a legalistic andnegotiation-oriented manner of thinking that is found, in varyingdegrees, in all the great European nations:

a) The United States deserves Europe's understanding, friendshipand recognition, though this does not mean to say that Europe'sinterpretation of the common democratic values and, above all,their application to the changing international situation, willalways coincide with the policies of the groups that hold powerin Washington.

b) Europe is one of the United States' economic rivals, but thisdoes not make it a political adversary. It believes in the currentglobalisation process and in the free market.

c) Europe respects all existing cultures and believes that they canall share certain values, which Europe attempts to spread bymeans of international consensus and legality.

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It defends the idea of a plural world governed by internationallaw and oriented towards peace, development and solidarity.

d) Together with the United States and all the peace-lovingnations, it is willing to combat not only terrorism but otherworldwide ecological hazards, arms and drug trafficking, regio-nal struggles, natural disasters and famine, etc.

e) It prefers to fight against all these enemies using multilateralaction and respect for the international legal rules, even thoughthese can be modified.

Finally, Europe cannot accept the use of unilateral force and preempt-ive attacks, even for the purpose of bringing about a better internationalorder; nor does it accept that its current preference for agreed and peace-ful means springs from its military weakness rather than from a morallymature international stance.

That is, Europe tries to apply the same ethical and democratic criteria thatcurrently govern relations between the European nations to a global world.

CONCLUSION

Europe needs to make a twofold effort: to engage in an ongoing dialoguewith successive US administrations and negotiate conflicting interests andpolicies in other areas by trying to understand each of its powerful ally'spolitical and ideological moments; and to influence American opinion anddecisions through participation and the persuasion of its media, just as theAmerican media influence their own public opinion, showing determinationand striving to defend common values and interests at all times.

A good example of the foregoing is the result of the recent NATO sum-mit in Prague, which marked a return to the collective action of the UnitedStates and its European partners and the transformation of the AtlanticAlliance from an organisation for the defence of Europe and the Atlanticarea into an organisation for global security.

EVENTS OF 2002

Combating international terrorism was the main issue in 2002. Eversince 11 September 2001, the United States has been waging a war, a

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long drawn out and difficult war, and expects the whole of the civilisedworld also to be at war against this vague, diffuse and landless enemy,whose leaders have yet to be located or identified, and which can strikeand be combated from anywhere in the world.

Nonetheless, there are indications of what and where the imminentdanger is—according to Washington, the components of the axis of evil:Iraq, North Korea and Iran (now that Afghanistan no longer belongs to thiscategory, surrounded as it is by a new web of alliances and by Americanpresence in Central Asia).

The fight against terrorism has led America to deploy its military to 80countries and has spurred Russia and China to align themselves withAmerica in order to settle accounts with their own Islamic rebels.

Al-Qaeda continued to organise a number of attacks (Tunisia, Bali,Kenya), but Washington can intervene anywhere in the world to defend itscitizens, interests and security, and has announced its readiness to usepreemptive war.

European public opinion, despite its differences with the UnitedStates, has also reacted to world insecurity—though not so muchagainst terrorism as against immigration, which it regards as a cause ofinsecurity.

At the Prague and Copenhagen Summits the Atlantic Alliance andEuropean Union decided to proceed towards an enlargement that has setback Russia's aims and accentuates the influence of America, whichstands to gain the most from Turkey's possible accession to the EuropeanUnion, as a result of which Europe would border directly on the Islamicworld and would be more heavily dependent on "Pax Americana", what-ever that is, as it once was when it bordered on Marxism. As a result, theEuro-Mediterranean policy would undergo major changes or be limited tothe Maghreb and western Mediterranean.

Although all the countries are affected by the war on terrorism, theIslamic world from Morocco to Indonesia is up at the front of the battleline. In 2002 the gap between the Islamic and Western worlds widened,primarily owing to the progressive destruction of the peace process byIsraelis and Palestinians alike, which Washington was unable to stop des-pite its efforts to ingratiate itself with the Arab world in order to involve itin the military solution to the problem of Iraq.

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Iraq has all the requisites for military intervention according toAmerica's current policy: its classification as rogue state, the priority ofeconomic criteria over political factors, and the consensus of the US admi-nistration to use multilateral action while upholding international legality(proof of this is Resolution 1441), provided this does not close the door tounilateral action if required.

All this in the context of the promise to democratise Iraqi society, thistime in depth, through education and economic liberalism. The goal wouldbe to make Iraq an example for the region, as the first step towards adapt-ing the Arab world to the West.

Another of America's concerns is the Islamic Far East, together withanother member of the axis of evil, North Korea, which lately looks set topress ahead with its plans for nuclear development.

In contrast, South America and Africa are not currently priority areas forWashington: in the case of the former, because its violence is not linked toIslamic terrorism and its economic liberalisation and culturalAmericanisation continue under way, while sub-Saharan Africa, with its con-flicts, famine and socioeconomic imbalances, is not part of the axis of evil,and American interests there (oil and other commodities) are not challenged.

SPAIN'S FOREIGN POLICY IN 2002

Spain's foreign policy basically continued along the same lines esta-blished at the beginning of Mr Aznar's government's second term (see the2001 and 2002 editions of the Strategic Panorama), based on bolsteringSpain's international role in a changing world environment, spurred by theinternal dynamism of Spanish society and Spain's involvement in the glo-balisation processes under way. The guidelines are outlined in the"Strategic Plan for external action 2000-2004", and have been adapted tothe new direction and pace of international currents since 11 September2001, particularly within the two organisations to which Spain belongs(European Union and Atlantic Alliance) and in which it carries out much ofits international action.

This section will be divided into two subjects: Spain's presidency of theEuropean Union in the first half of 2002, and the updating of its basic prio-rities by the current minister of foreign affairs as a result of the new worldlandscape.

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The Spanish presidency of the EU

Spain, which assumed its third European presidency at the beginningof the year in a complex international environment, proved its ability tomanage efficiently the biggest international collective enterprise, bringingabout consensus and establishing common positions. For Europe—with aunified voice—can play an important role on the international scenethrough its peace efforts in the Middle East and as a privileged interlocu-tor with the United States, Russia and Latin America.

We should recall that the main objectives the Spanish government setitself in the programme entitled "More Europe" for the six-month presidencywere: combating terrorism in a co-ordinated manner, boosting the EuropeanUnion's world role by working intensely to develop its external policy, gua-ranteeing the successful introduction of the euro and deepening economicreforms, bolstering the common asylum and immigration policy, which isnow in its final stage, and forging ahead with the reform of the institutions.

Let us now examine these points in greater detail:

Combating terrorism

Spain has always played a pioneering role in building the EuropeanUnion's "third pillar" (a common area of freedom, security and justice),such as at Tampere, aware of the need for greater co-operation and legis-lative and judicial harmonisation between the member states in order tofight against a scourge that affects everyone.

The Spanish presidency therefore made combating terrorism its prio-rity from the outset and succeeded in approving and implementing newinstruments that enshrine the political agreements adopted during theBelgian presidency.

The measures adopted during the six-month Spanish presidency werecentred on four basic objectives: reinforcing the instruments of the rule oflaw, strengthening co-operation between law enforcement and the secu-rity forces, stepping up international co-operation and combating thestructures that support terrorism, and encouraging measures to preventterrorists from taking advantage of the "common area". It was also deci-ded to boost Europe's role in fighting terrorism by making more resourcesavailable, both human and material, and the list of organisations, entitiesand persons linked to terrorism was updated.

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Also, in the framework of the action plan for combating terrorismapproved by the Fifteen in September 2001, measures were taken to com-bat terrorists' support structures in aspects such as exchange of informa-tion, border control, co-operation between financial intelligence units andthe freezing of accounts.

As a result, the Seville European Council recognised the importance ofcombating terrorism in the framework of the Common Foreign andSecurity Policy and the Common Defence Policy.

The euro and economic reforms

The successful introduction of the euro and the revival of the Lisbonspirit are two major issues that were also addressed by the Spanish presi-dency.

Spain has carefully monitored the process of bringing the new com-mon currency into circulation, in close collaboration with the Commissionand the European Central Bank. Today the euro is already a synonym ofstability and growth in an economy that has witnessed the reemergence ofthe modernising Lisbon spirit and is intent on converting the EU into amore dynamic area with a view to achieving full employment by the end ofthis decade. Therefore, the Barcelona European Council in March markeda point of no return in the process of liberalisation and economic opening-up, establishing an ambitious timetable of accomplishments in key areassuch as energy, transport and employment.

"More Europe" also signified considerable headway in energy matters.With the interconnection of 10 percent of electricity grids, which will be areality in 2005, Spain will cease to be an "energy island". Furthermore, thesmall and medium-sized enterprises and major consumers will benefitfrom the opening up of 70 percent of gas and electricity markets in 2004.

The transport sector saw the implementation of joint projects such asthe Galileo Programme and the Single European Sky, which is due to belaunched in a couple of years' time.

Finally, reviving the economy was another major concern of the SevilleEuropean Council, where the Broad Economic Policy Guidelines (BEPC)were adopted. These focus on two goals: macroeconomic stability andgrowth, based in turn on the reform of the labour, goods and services mar-kets, and will reinforce the stability and growth pact of the Lisbon pro-gramme.

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External Policy

The six-month Spanish presidency was marked by a troubled environ-ment still suffering from the aftereffects of 11 September 2001, with con-stant tension in the Middle East and an international economic crisis thathas hit the most developed economies.

The identity of Europe's CFSP criteria was manifested in the MiddleEast conflict, in the Barcelona and Madrid declarations and in the initiati-ves of the "Quartet", a group formed by the Union, Russia, the UnitedStates and the United Nations Secretary-General for the purpose of achie-ving peace in the area.

The European Union-United States Summit bore witness to the identicalvalues that underpin transatlantic relations and the mutual commitment tofighting terrorism. Specific progress was made, such as the agreement onjudicial co-operation in criminal matters, extradition and mutual assistance.

The European Union-Russia Summit consolidated the strategic rela-tionship by strengthening political dialogue and co-operation in securitymatters and crisis management.

Likewise, at the European Union-Canada Summit, progress was madein co-operation in scientific and technological research, the environmentand sustained development.

Europe's relations with Latin America are growing closer, partly thanksto Spain. To the traditional cultural and economic links we should now addprivileged co-operation in the form of specific agreements, such as thosesigned with Mexico and Chile, which afford a special status to political,financial and trade relations. It is no coincidence that Europe is the world'snumber one investor in this area.

The Madrid Declaration marked the development of a new frameworkfor relations with the region based on full equality and shared efforts andreiterating Europe's commitment to democracy and the full institutionaldevelopment of all the Latin American countries.

As for the Mediterranean, the Barcelona Process begun in 1995 conti-nued with its attempts to improve relations between the countries on ei-ther side of the Mediterranean.

Specific cultural, commercial and economic goals of great importanceto the stability and development of the region were set at the Valencia

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Summit. A partnership agreement was also signed with Algeria, the Euro-Mediterranean Foundation for cultural dialogue was set up, and it wasdecided that the European Investment Bank should double the funds itsupplies to the region.

Common asylum and immigration policy

This issue was examined in detail at the Seville European Council,where note was taken of the need to manage migratory flows with a com-mon policy that allows the integration of people who are legally estab-lished in Europe and, at the same time, combats illegal immigration andthe smuggling of people. Europe needs immigration and benefits from it,but its capacity to take in new inhabitants is limited. Therefore a balancedset of global measures, revolving around four courses of action, wasapproved at Seville:

— First, combating illegal immigration and the smuggling of people.

— Second, co-ordinated management of the European Union's exter-nal borders, the first step towards a border policy.

— Third, making immigration policy part of the Union's relations withthird countries. Europe offers to co-operate technically and finan-cially with the countries of origin and transit of illegal immigration;this involves both the joint management of migratory flows and bor-der control, and, on the part of these countries, readmission of ille-gal immigrants.

— Fourth, measures were adopted to speed up the legislative work inprogress to define a common asylum and immigration policy.

Enlargement of the European Union

Intense work was carried out to achieve a consensus between theFifteen on this matter. Spain, over and above private interests or partialviews, reaffirmed its commitment to what will be Europe's biggest everchange: eastward enlargement.

The timetable envisaged at Stockholm was met. As a result, the acces-sion treaties can be signed in the first quarter of next year and the tencurrent candidate countries will be able to take part in the 2004 electionsto the European Parliament.

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The effort was recognised by the European Commission, as negotia-tions were completed for a total of 83 chapters—more than in any otherpresidency.

Spain also respected the Nice work schedule, adopting common posi-tions with respect to agriculture, regional policy and co-ordination of struc-tural instruments, financial and budgetary provisions and institutions, andit can therefore be said that the process has now entered the final stretch.

Institutional reforms

The Seville European Council made significant headway in institutionalreforms, in accordance with the proposals presented by the presidencyand by the secretary-general of the Council, and with the work carried outby the Convention for the future of Europe.

Measures were approved which do not require any amendments to thetreaties and whose effectiveness and operability is therefore immediate, asthey enable Community mechanisms to be speeded up and simplified.The improvements relate to the European Council and the Council, andapply three principles: co-ordination, simplification and transparency.

There is widespread determination within the Union to deepen the currentdebate on the presidency. At Seville the need was discussed to seek mecha-nisms to make the current system of rotating six-month presidencies moreeffective, while respecting the principle of equality of the member states.

Finally, the need to build an accessible Europe that is close to its citi-zens emerged.

Current formulation of Spain's foreign policy

Here we will refer to the different addresses delivered by the minister offoreign affairs in autumn to outline her department's policy. The prioritiesare as follows:

— A priority, full-scale objective of Spanish foreign policy is fightingterrorism, which endangers "the survival of our principles, ourvalues and the fundamental rules of coexistence".

— Relations with the United States. The events of 11 September 2001"have led us to attach greater importance, if this is possible, to co-operating more closely with United States", to military policy and to

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fighting terrorism. A consequence of the foregoing is the determi-nation to "intensify talks between the European Union and theUnited States and to strengthen transatlantic relations. (...) [Spain's]presence and influence in the different forums requires a deepeningof consultations and co-operation with the United States; further-more, on another plane, "we will pay preferential attention to theHispanic community" in that country.

— Spain considers itself overwhelmingly to be part of Europe andtherefore wants "a united and strong Europe, capable of defendingits principles and interests, which accordingly calls for a moreeffective and visible foreign and security policy"; the EU componentof our foreign policy furthermore strengthens and supplements it.

Spain supports Europe's international commitment against terro-rism and the enlargement of the Union, "although it is aware of theefforts it will have to make to overcome the shortcomings in its rela-tions with most of the future members".

— Spain will attach special importance to relations with the RussianFederation.

— "Spain's Ibero-American dimension", which is "its main asset in theworld and also its greatest responsibility, which its shares with therest of the nations that make up the Ibero-American community onboth sides of the Atlantic", must be strengthened as an area ofdemocracy and freedom, which are the values of the West.

Spain strives to ensure that this commitment to Latin America is as-sumed by the other European Union partners; the strategic partners-hip between both regions is essential in a globalised world. Thanks toSpain, Latin America's ties with Europe are closer than ever.

Spanish investments in Latin America, like those of the otherEuropean nations, are facilitating "its permanent integration into theworld economy, and are also an essential factor for modernisationand growth".

— As regards the Mediterranean, the general framework is the so-called "Euro-Mediterranean dialogue" which the different Spanishpresidencies have promoted since 1995. The result of this effort isthe Barcelona Process which, as witnessed at the Valencia confe-rence in April, is still active despite the situation in the Middle East.

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But the priority area of Spain's external action is northern Africa(especially our inevitable relations with Morocco), whose strategicimportance to Spain calls for a global approach. Prominent fea-tures of this approach are the regulation of immigration, the fightagainst poverty and support for political and social reforms, the keyto the future stability of the Maghreb, including social change: inte-gration of women, promotion of human rights, etc, and, lastly, ajoint effort to combat terrorism.

In the Middle East, our foreign policy "is based on three areas:strengthening bilateral relations, an active and co-operative dialo-gue with the regional organisations and continuous monitoring ofthe Arab-Israeli negotiation progress in order to achieve a just, glo-bal and lasting peace. Spain will continue to strive to maintain theEuropean Union's co-ordination with United States, Russia and theUnited Nations, always favouring negotiation over the current mili-tary tension".

As for Iraq, Spain will contribute to finding a diplomatic solution tothe current situation in the country; this solution must fully complywith the international legality enshrined in the United NationsOrganisation.

Spain also supports political dialogue with Iran.

— With respect to Asia, the Asia-Pacific framework plan 2000-2002has been developed and an Asian centre, the Casa de Asia, hasbeen set up in Barcelona.

— As regards Africa, the action plan for sub-Saharan Africa 2001-2002 was drawn up on a bilateral basis. Africa's own efforts to sta-bilise the region, both within the United Nations and through inter-national sectoral conferences, are also supported.

Spain's interests in Africa are mainly fishing, certain commoditiesand regulating immigration.

— In security matters, Spain is assisting with the plans to adapt NATOto the new times: "a NATO which, while opening its doors to newmembers from Eastern and Southern Europe, is better prepared toface the new challenges and threats of the 21st century, especiallythe fight against terrorism". It is therefore hardly surprising that theresults of the Prague Summit were welcomed with great satisfaction.

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— Protection of human rights and development co-operation.

— Promotion of Spanish culture and language and development of theconsular network in order to cater not only for the Spanish coloniesbut also for the movements of Spanish citizens abroad (tourism,business) and to co-operate in controlling the movements of non-EU citizens.

This list covers all the usual areas of Spain's foreign policy, but theorder of priorities has been altered, as the chief and full-scale priority isnow combating terrorism and linking this to close the co-operation withUnited States; this means endeavouring to reach agreements withWashington at the international forums and strengthening transatlanticrelations, that is, dialogue between Europe and United States—not aneasy task at present.

In contrast, relations with the European Union continue to be an essen-tial component of our foreign policy. Therefore, other priorities (Russia,Ibero-America and the Mediterranean) are addressed from a Europeanangle. Spain can act of its own accord in regions where there is no jointEuropean policy, such as Africa and Asia.

Spain relies on its own—and at times isolated—foreign policy inongoing disputes such as Gibraltar, the Western Sahara, relations withMorocco, etc.

Meanwhile, Spanish diplomacy, which performed its presidential dutiesrealistically and competently in circumstances that were less favourablethan on previous occasions, faces another challenge in 2003: its duties asan elected member of the United Nations Security Council. This will notonly put its competence to the test but also strain the coherence of itsforeign policy priorities, especially when there is no common Europeanposition on major international issues.

Indeed, our country (a medium-sized power with growing links with theglobal centres of power, and a geostrategic position that makes it a chan-nel for action at the Mediterranean border with the Muslim Arab world andwith the problem of terrorism) is going to be a necessary player in the UNSecurity Council debates in times of conflict and changing internationallegality.

Being in the limelight has its pros and cons: on the one hand it willforce Spain to define its stance on issues such as the decolonisation of the

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Western Sahara and the intervention in Iraq and, on the other, it will help itdefend itself in its own quarrels.

At any rate, the course current international events are taking, as exa-mined in the first part of this chapter, must be reflected in Spain's foreignpolicy. Let us hope that this does not disorientate it but, instead, helps theworld's 10th largest economic power, with a rich culture and proven recordof democracy and freedoms, make a specific contribution—and one thatis useful to international peace and moral order—to this globalisation pro-cess that is sweeping us along.

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CHAPTER TWO

THE BUILDING OF EUROPE

THE BUILDING OF EUROPE

By Javier Pardo de Santayana y Coloma

OVERALL IMPRESSION

Amid the still recent upheaval caused by 11 September, which madesecurity the centrepiece of world policy, the year 2002 was ushered in bytwo highly important events: the entry into force of the euro as singleEuropean currency and the start of the work of the Convention to preparefor the 2004 Intergovernmental Conference. The first of these eventsmarked the completion of the first stage in the building of the EuropeanUnion; the second should lay the foundations for its future.

The euro entered into force in a surprisingly natural manner, provingthat the procedure followed by the Union had successfully permeated thepublic opinion of the European countries to the extent that it did not pro-voke significant confusion or rejection. The deadlines were met withoutincident and an adaptation period began which, over time, should conso-lidate our currency and contribute to the credibility and strength of theUnion.

This, together with the economic situation characterised by forecastssuccessively delaying future recovery and the problems that arose in theUnited States, where major financial scandals were uncovered, helpedreverse the continual downward trend the new European currency had dis-played with respect to the dollar. Indeed, by midyear the euro had risen toa higher rate than the dollar, even though the recession in Germany andsigns of a recession in France had caused the value of the Europeancurrency to dip even lower around the time it entered into force.

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The Convention that is to prepare for the 2004 IntergovernmentalConference set to work in March, spurred on by the need to improve theworking of the institutions and to ensure and increase their efficiency—agoal that will be difficult to achieve in view of the future enlargement of theUnion. This "reconstruction" should ensure the institutional balance andbring the Union closer to citizens by making it more understandable. Toachieve these aims, it was decided to draw up a sort of European"Constitution". This daunting task, which combines the building of a com-mon architecture with respecting and harnessing Europe's broad diversity,began with a debate in which social organisations and individuals wereinvited to take part. It was feared that the difficulties of such a complexprocess would be further exacerbated both by the Commission's misgi-vings about the possible adoption of intergovernmental formulas, and bythe "small" states' wariness of the predominant role of the "large" states.

Nevertheless, the presentation delivered in October by the president ofthe Convention, Valéry Giscard d´Estaing, gave the impression that notonly were some of the initial disagreements being overcome; major pro-gress was also been made towards a consensus on certain basic defini-tions. This would seem to suggest that some fairly sound proposals willhave been developed by the time the Intergovernmental Conference takesplace.

The major successes, such as the acceptance of the single Europeancurrency, and the great hopes raised by events like the start of the work ofthe Convention, failed to conceal a certain feeling of disappointmentregarding the Union's future political role. In the wake of the events of 11September, Europeans were confident that the international communitywould focus more strongly on a multilateral approach to which Europecould contribute its knowledge and own specific qualities, even if only tocomplement the action led by the only major world power in the politicaland military sphere: the United States of America.

There was certainly cause for entertaining such thoughts, asWashington had initially reacted to the new situation by settling part ofits debt to the United Nations and seemed to recognise America's needfor support from other countries, which it invited to join forces in a world-wide antiterrorist effort. However, as 2002 progressed, it became clear thatthe Americans were tending towards unilateral action and were willingeven to disregard their partners and friends. The hopes of witnessing ajoint action of the reasonable countries vis-à-vis the major problems of

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substance accordingly waned and such action was left in the hands of theAmericans, who lost their chance to benefit from the well-meaning contri-butions of the Europeans. Even the European Union's antiterrorist efforts,which had begun to make major headway following the Tampere Summit,were regarded as lacking the necessary vigour from the other side of theAtlantic, where the fight against terrorism is considered part of a veritable"war".

America's announcement of its intention to undertake military actionagainst Iraq added fuel to the debate on the relations between the UnitedStates and its European allies. While the Europeans reproached the US notonly for its tendency towards unilateralism but also for its scant regard forEurope's opinions and capabilities, the Americans rightly criticisedEurope's unwillingness to assume the burden of security. America's deci-sion to take the issue of Iraq to the United Nations and the surprising con-sensus reached by the Security Council eased the conscience of theEuropeans, who congratulated themselves on the possible influence of thepressure they had exerted.

In economic sphere, the European Union expressed its indignation atthe behaviour of the Washington government, which was prepared toapply a customs duty of up to 30 percent on imported steel. The UnitedStates' position regarding the Kyoto protocol, the International CriminalCourt and the “Earth Summit" at Johannesburg was also criticised.America's attitude to these affairs undermined the credibility and moralauthority of Washington's leadership, as it was interpreted as lack of sen-sitivity towards some of the major problems that affect the whole of man-kind and urgently require a joint solution.

Germany and France, which are set to become "Europe's engine",continued to face major difficulties, so much so that their economic pro-blems caused them to be reprimanded for failing to comply with theStability Pact and made it necessary to loosen this pact with a two-yearmoratorium, precisely when the downward adjustments made to the fore-casts for the euro area were calling for structural reforms to give thenecessary impetus to its growth potential. The "flexible" interpretation ofthe significance of the Pact gave rise to certain political turmoil and led tothe questioning of the intentions of the German government, which had inthe past been its main champion. France, Italy and Portugal also benefi-ted from the moratorium. On another note, the pressure of the electionsled Mr Schröder to refuse to support military action against Iraq; in doing

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so Berlin relinquished any type of leadership in security and defenceissues and expressed an attitude that differed greatly from that of theBritish government. The increasing influence the Greens enjoy in theGerman government will merely tip the balance even further in that direc-tion.

The perplexity caused by America's scant enthusiasm for multilateralaction led the future of the transatlantic link to be questioned. Indeed, thefuture of relations between America and Europe has now become one ofthe major topics of debate. A side-effect of this problem, the special rela-tionship between London and Washington in security and defence issues,also raised certain doubts as to the future role of the United Kingdom inbuilding this dimension of the European Union. We should remember that,although since the Franco-British Summit of St Malo in December 1998Prime Minister Tony Blair had taken it upon himself to spearhead the pro-cess leading to the establishment of the Headline Goal that will provideEurope with a suitable military capability for carrying out Petersberg-typemissions, for some time now, particularly since the Afghanistan crisis, theUnited Kingdom has been teaming up with the United States and appearsto have distanced itself somewhat from its European Union partners, per-haps because Britain's view of European defence is limited to the notionof a European Identity within NATO and a Common Foreign, Security andDefence Policy within the Union. To counter these trends and give freshimpetus to European defence, the appropriateness of reviving the "St Malospirit" was discussed, though the United Kingdom did not prove verywilling.

The spectacular increase in the American defence budget dashedEurope's hopes of closing the gap in military capabilities, even partially, somuch so that this is unlikely even to constitute an incentive for stepping updefence expenditure or for assuming more determined attitudes. One hasthe impression that the European Union is moving towards a limited objec-tive such as responding adequately to Petersberg-type missions but with-out the commitment and impulse we are witnessing in America in res-ponse to the new challenges arising from its own security. The develop-ment of the NATO Defence Capabilities Initiative (DCI), which progressedreasonably well as regards doctrinal and structural aspects but covered littleground in areas that call for new resources, raised doubts about the chan-ces of success of an effort which, like the European Capability Action Plan,is essentially based on voluntary contributions. This led the Alliance'sSecretary-General, Lord Robertson, to trim the number of programmes in

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the DCI to 40 or so, divided into four blocks, and to assign specificrequests to each country. This new approach, which establishes specificcommitments in accordance with the "Prague spirit" (which we will bedealing with in the following paragraph) and the inevitable relationship bet-ween any progress made within NATO and that of the European Union,provides Europeans with a fresh opportunity to react and commit them-selves to making an effort in keeping with the priority that is attached tosecurity problems nowadays.

Indeed, Prague shook the foundations of the Alliance at a time whenNATO seemed to be considering the possibility of becoming a forum forthe organisation of ad-hoc missions, as military response was tending tofocus on national operations with NATO's support. Such a development,which could be interpreted as renationalisation, was dangerous in itself,because one of the mainstays of the Alliance's force is precisely collecti-ve action, and in this respect any "return to nationalisation" would amountto a step backwards. But the decision made by the Alliance at the Czechcapital to create a Rapid Response Force as an instrument for combatingterrorism collectively brought about a radical change in the situation.

The fact is that the Prague Summit was a landmark event where, onceagain, the Alliance showed its capacity for renewal. Overcoming Europe'sshortcomings in security and defence matters, American leadership, inaddition to reincorporating multilateral action into the Atlantic organisation,adapted NATO to what Washington considers to be the reality of a threa-tened world in which it is necessary to act with great courage, as changesmay require traumatic operations. NATO thus completed its shift fromEuropean defence to global security. In contrast, as regards the disputeover Iraq, the prevailing position was that of Europe, which, althoughloyally aligned with its American partner, called for careful respect for the"international situation" and managed to ensure that the summit commu-niqué made constant reference to the United Nations and its SecurityCouncil.

The leap forward made at Prague was also reflected in the broadeningof the scope of military action—to "where required", no less—and in thedecision to carry out the biggest enlargement ever, extending NATO's fron-tiers to Russia, taking in seven new countries (Estonia, Latvia, Lithuania,Romania, Bulgaria, Slovenia and Slovakia) and leaving the door open tofurther accessions. Surprisingly, the accession of the three Baltic stateswas treated as a relatively natural occurrence by Moscow, which had

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always considered such a move to be little short of a "casus belli". Thetechnicalities of the problem of the Kaliningrad enclave's links with Russiawere addressed separately.

In curious consonance with NATO, in November the European Unionalso decided to take in a further ten countries in 2004 (Estonia, Lithuania,Latvia, Poland, the Czech Republic, Slovakia, Hungary, Slovenia, Cyprusand Malta), thereby confirming the guideline established at the Sevillesummit, where the goal of an accession en bloc with very few exceptionswas outlined. However, several factors could hinder this. It was feared thatthe financing of the cohesion and structural funds and, particularly, theCommon Agricultural Policy (CAP)—two aspects over which there is a bat-tle between the countries that contribute the most to the funds and thosethat benefit from them—would pose difficulties. The fact that Spain is abeneficiary of both had made it advisable not to address the solutionopenly during its six-month presidency. However, the surprising resur-gence of the ailing Franco-German axis, spurred by the need for an agree-ment between these two countries, which precisely embodied the twoopposite positions, paved the way for a possible solution to this problem.A further difficulty was the possibility that the new referendum to be heldin Ireland in October would confirm that country's opposition to enlarge-ment, but, much to everyone's relief, the majority voted in favour of appro-ving the Treaty of Nice.

For the time being, some candidate countries have been excludedfrom the enlarged European Union. Romania and Bulgaria, now forced towait until 2007, are consoled by the fact that they will become full mem-bers of NATO in 2004. Turkey, however, has yet to be given a date despitethe set of reforms approved by its parliament in August in accordance withthe requirements established by the criteria laid down at Copenhagen in1993. The European Union, probably surprised, welcomed the reformswith certain reservations, no doubt pleased but not venturing to predicttheir specific effects.

The resounding victory in the Turkish elections of an Islamic party("Justice and Development", AKP) which a prosecutor is seeking tooutlaw, and whose leader Tayyip Erdogan is banned from parliamentowing to a conviction, proved to be a further complication. The Unionreacted cautiously: on the one hand, it was necessary to prevent its deci-sions being seen to be motivated by "religious" or "cultural" factors; on theother, Turkey's aspirations of joining the EU were an appropriate modera-

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ting factor vis-à-vis the feared possibility of future excesses. Therefore,following the declarations made by the leader of the winning party, whoaffirmed that Europe and loyalty to NATO were a priority and played downthe religious nature of his party, describing it as a "new centre party", theEuropean Union decided to keep calm and wait and see what the futurebrings, not paying attention to the effect of words uttered in the heat of vic-tory.

This new situation, complicated by the ousting from the Turkish parlia-ment of the traditional parties as a result of the boomerang effect of anelectoral law intended to achieve the opposite of what actually happened,raises doubts about the country's future. It is also feared that new pro-blems may arise and existing ones may worsen, such as the conflict be-tween Greece and Turkey in the Aegean and Cyprus, and the difficulty ofthe Union using NATO's military assets. What we may be certain of is thatthe Turkish military will keep a close watch on the situation to ensure thatthe spirit of Ataturk's revolution is not violated and that the strategic reper-cussions of what some have described as a "political earthquake" do notturn it into disaster. In an environment like the current one, where the dan-ger of possible conflicts based on cultural factors or pretexts is hoveringover our heads, it remains to be seen whether Turkey will become a night-mare or a timely example.

Developments in the Balkans continued without any major upheavals.Bosnia-Herzegovina proved it is now fairly stable and returning to normal.Although it made less headway, Kosovo also showed signs of progresstowards pacification following the arrival in power of President IbrahimRugova. If this progress were to become consolidated in the future, itwould prove to public opinion that the timely application of military forceis useful in managing crises and helping to establish a peaceful order. Thesuccess of the military and political action carried out in that region istherefore of great significance to the future.

At the Barcelona summit the possibility was considered of making theso-called "Amber Fox" operation, implemented in the Former YugoslavRepublic of Macedonia, where reserve troops for Kosovo are stationed, aEuropean operation. However, this attempt was thwarted by the failure toreach full agreement on "Berlin Plus" (that is, a permanent arrangement foraccess to NATO assets) and the first purely European operation thusended up being a police operation and, as such, strictly civilian in nature.France's proposal of adopting a formula like "Operation Alba", that is, led

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by one particular nation, was dismissed as it meant renouncing the idea ofa strictly "European" force and would have undermined the leverage thisissue has as regards finding a permanent solution to the problem referredto earlier as "Berlin Plus", which is threatening to dash the chances ofachieving an operable European force by 2003. As feared, the Greek pre-sidency failed to make any progress in this area.

In the Middle East, Europe fought steadfastly but with scant successto moderate America's pro-Israeli position and to steer the country to mul-tilateral action. The European Union's few achievements include keepingMr Arafat as the Palestinian interlocutor and the creation of the "Quartet"formed by the United Nations, the United States and Russia and theEuropean Union itself as an instrument for pressuring the parties to theconflict. The fact is that the overall situation worsened, so much so thatEurope's efforts to give impetus to the faltering spirit of dialogue in theMediterranean environment came to nothing.

The existing enmities and divisions were clearly witnessed at the Euro-Mediterranean conference held in Valencia on 22 and 23 April. The high-light of this conference was the agreement signed by the European Unionand Algeria. As regards security, the conference expressed the need tostrengthen dialogue in defence matters, but found its interlocutors to bescarcely motivated owing to the North African countries' usual misgivingsand tendency to view the European Union solely as a potential source offinancing. In May the Spanish presidency organised a generously fundedand conscientiously prepared seminar which was only attended by num-ber twos from the Arab countries. There is no doubt that it takes two totango, even though Europe continues to be willing to exercise the com-mendable virtue of patience.

During the Spanish presidency in the first half of 2002, the EuropeanUnion, which had already adopted measures to combat international terro-rism, addressed one of the problems that will most influence its future:immigration. This phenomenon, which can be considered to have reachedhistoric proportions, was calling for common solutions, since any dys-function can cause major disturbances in the migratory flows, such as thepossible "call effect", that is, orientation of these flows towards the mostlenient countries. The need for a determined solution to this issue grewmore urgent during the first half of the year following the results of theFrench and Danish elections—increasingly negative feelings towardsimmigration, which, in political terms, translate into support for radical

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stances. A particularly significant case was France, where Jean-Marie LePen's party's surprising first-round results gave rise to a second round thattriggered a patriotic reaction in which the political parties akin to thegovernment and opposition joined forces in order to save democracy.

Another of the aims of the Spanish presidency was to revive the spiritof liberalisation championed by Messrs Blair and Aznar and agreed at theLisbon summit. Although the problems raised by the French governmentslowed the pace of developments in this field, it was possible to breakthrough some barriers and embark on significant processes. Throughoutthe year on occasions it became clear to what extent elections interferewith European affairs by preventing governments from committing them-selves on what their respective public opinions regard as sensitive issues.The continuity of action is disturbed by the organisation of progress intosix-month spurts for which responsibility rests chiefly with the nationalpresidencies, which tend to pursue success within a fixed term. The in-crease in the number of member states will further complicate this mecha-nism and accentuate the asymmetry that already exists.

Nor should we underestimate the problem of the high cost of the sum-mits and the huge security measures they require. As a result, a number ofsuggestions were raised at Seville with a view to modifying the currentsystem. The announced proposals, which can be classified into two cate-gories (those which require modification of treaties and those which donot) envisage longer terms and even the future appointment of a Europeanpresident.

The chief accomplishment of the EU-Latin America and CaribbeanSummit (17 and 18 May, in Madrid) was the agreement signed by theEuropean Union and Chile, which is regarded as a "second-generation"accord and, as such, a possible future model and incentive for other coun-tries of the region to follow in Santiago's footsteps. The EU also signed anagreement with Russia to co-ordinate the fight against terrorism; this illus-trates the growing spirit of co-operation we are witnessing betweenMoscow and the West, whose relations are currently very constructive.

One of the highlights of the year was the approval of the "Galileo" pro-ject at the Barcelona summit. The impression recorded in last year'sStrategic Panorama was extremely pessimistic owing to the almost insur-mountable resistance of some countries, such as Germany, whose eco-nomic problems make it wary of any fresh expenditure. The consensusreached regarding the "Galileo" programme signifies no less than a deci-

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sion not to throw in the towel as regards technological effort and not toallow Europe to become subordinated permanently to the United States inthis respect.

THE BARCELONA SUMMIT (15 AND 16 MARCH)

The Spanish presidency was shouldered with a backlog of manyimportant issues, a good deal of which had been dragging on from pre-vious presidencies. The environment in which it had to address these res-ponsibilities was rather unfavourable, characterised above all by the invi-sible presence of future elections in several countries, including Franceand Germany. Even so, the Barcelona summit managed to clear somehurdles and make significant progress in some key issues of extremely far-reaching importance. In particular, many of the agreements included atimetable for their implementation, which is always an extra guarantee.

José María Aznar, like Tony Blair, was keen to forge ahead with the libe-ralisation process begun at Lisbon as a means of giving impetus to theeconomy of the Union countries with a qualitative leap. The most impor-tant achievement was the agreement, even by France, to begin to liberal-ise the energy sector to boost competitiveness. There was widespreadagreement about the need for more radical liberalisation, but the resis-tance shown by France, an out and out advocate of public service, madeit necessary to adopt a formula whereby the gas and electricity markets,which account for over 60 percent of the sector, would be opened up tonon-national operators in 2004. This is no doubt a good result bearing inmind that the talks started from scratch. This decision was also accom-panied by an agreement to adopt a directive on energy taxation byDecember 2002 at the latest. It was also decided to study the possibilityin spring 2003 of opening up the market to domestic consumers and atimetable was established for increasing electricity interconnection, whichshould account for 10 percent of generation by 2005. In the case of Spain,this involves trebling existing connections and bringing the Iberian penin-sula out of its isolation as regards energy. It will also save citizens from thethreat of power cuts caused by overburdened transmission lines.

Another step taken at Barcelona, and one that was essential to thecompletion of economic and monetary union, was the decision to fully inte-grate the financial markets by 2005, for which directives on financial gua-rantees, intermediaries, abuses and employee pension funds were to be

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drawn up during 2002. Considerable impetus was given to the transportsector by promoting the development of the trans-European networks, fas-ter rail freight transport, liberalisation of port services and establishment ofa single European sky, which will reduce delays and waiting time.

The Union unexpectedly reached a consensus regarding the imple-mentation of the "Galileo" programme for a satellite navigation system,which will enable Europe to develop a technology of its own, geared tocivilian use and applicable to military ends, as opposed to the US GPSsystem on which we currently depend. As well as giving impetus to re-search and development, this decision will have economic consequencesand a strategic influence on the balance of power between the UnitedStates and the European Union, as well as on Europe's future role in theworld arena. Approval of the funding of the project, its launch and the set-ting up of a joint venture were scheduled for 2002. Other specific commit-ments were made regarding education and research with the aim of achie-ving a modern, and accordingly knowledge-based, Europe.

The Barcelona European Council endeavoured to force a solution tothe Greco-Turkish dispute that is threatening to prevent the Europeanforce becoming operable by 2003. For this purpose it was decided that theEuropean Union would not operate in Macedonia unless a full agreementwas reached on “Berlin Plus". However, this pressure failed to quell bothsides' determination to hinder the process.

In addition to the aforementioned results, certain achievements on thesocial front are also worthy of mention, such as the approval of a standardEuropean health card, the decision to progressively increase retirement ageand the agreement to gradually do away with early retirement and worktowards a flexible retirement system. It was decided to achieve full employ-ment, regarded as a priority EU issue, by applying social measures of thiskind as well as the others already referred to, which together comprise ablock of liberalising economic reforms designed to stimulate growth basi-cally through greater competition. Indeed, the Barcelona Council was con-siderably more focused on social affairs than some expected.

THE SEVILLE SUMMIT (21 AND 22 JUNE)

The main issue discussed at the Seville European Council was immigra-tion, the volume and social and political effects of which were calling for theestablishment of a common policy, which was to be developed within two

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years and treated as a priority issue. While it is not intended to make Europea “fortress", it is not advisable for it to be a "sieve" either. For this purposea basic distinction will be drawn between "legal" and "illegal" immigration.

The commitment, which shies away from the demagogy with which thisissue is often addressed and aims to be as realistic as possible, involvesestablishing common rules for asylum and immigration policy, integratingimmigration policy into external relations, combating the people-smugglingcriminal gangs, and a joint system of border control. The common rules areto be drawn up during 2003, and should establish the requisites for refugeeand permanent resident status and for family reunification, the rules of pro-cedure and the responsibilities of each state. Future co-operation agree-ments with third countries are to include a clause committing these coun-tries to combat illegal immigration and negotiate readmission agreements.To combat illegal immigration, a visa identification system will be set upalong with a co-ordinated programme run in conjunction with varioussource countries for the readmission of clandestine immigrants.

As for joint border management, it was agreed to set up immediately acommittee of experts to co-ordinate the system. This involves training liai-son officers and drawing up a set of common rules, as well as provisionsfor financial compensation that take into account the different migratorypressure and size of each country's borders. At a later date, it would be agood idea to extend the agreements to include common guidelines forintegrating legal immigrants, the need for which is recognised both eco-nomically and socially.

Spain, with the support of countries like Germany and Italy, was infavour of including another agreement on the possibility of imposing sanc-tions on countries of origin or transit that are not sufficiently willing to co-operate in combating illegal immigration. The opposition of France, whichwas only backed by Sweden, made it necessary to adopt a rather morelenient formula consisting of an incentive for countries that readmit ex-pelled migrants, though the degree of co-operation in each country will beevaluated, and the Union may adopt "necessary measures of response".The initial intention is therefore conveyed in a warning that should be takeninto consideration.

The Seville summit reassured the enlargement candidates by confirmingthe accession timetable, despite the threats stemming from the current lackof definition over the future of the Common Agricultural Policy and the struc-tural and cohesion funds, which are so essential to the future members.

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As for the fight against terrorism, the Spanish presidency proposedand encouraged the inclusion of this question in Europe's CommonForeign and Security Policy. Combating terrorism was also a key issue ofdefence. Indeed, although it was studied during the Belgian presidency,the short time available led to Spain being shouldered with the responsi-bility of taking the first concrete steps, and the result was scarcely morethan a concept document of limited scope. A more ambitious approach tothis issue based on the experience of the Afghanistan conflict, which couldlead us to debate on the possibility of aiming for a sort of "PetersbergPlus", was immediately ruled out, as if such a proposal were out of place.The fact is that any move regarded as "revolutionary" gets referred to theConvention, which is turning into a pretext for not addressing the thorniestand most difficult issues. However, in some countries opinion polls recor-ded the growing interest of public opinion in security matters and over timethis may prompt politicians to adopt more determined attitudes. At anyrate, it remains to be seen what impact a possible military operation in Iraqwould have on this trend.

The effects on defence of the document on combating terrorism,which, as pointed out, merely outlines the concept, are limited to the needto provide greater protection for deployed forces, the exchange of intelli-gence, military co-operation with civilian authorities and matters relating tothe "single European sky"; the inclusion of the latter sprang from the par-ticular concern caused by the manner in which the attacks against theUnited States in September 2001 were carried out. As a result of this workit was decided to include this issue on the Danish presidency's agenda.

The proposal for the establishment of a formal council of defenceministers, which was discussed during the Belgian presidency and regar-ded as very interesting by the Spanish presidency, was again greeted withmany misgivings in February, particularly on the part of the "neutral" andNordic countries. However, an initial step was taken and may have futurerepercussions, since during the General Affairs Council in May the defenceministers were allowed to discuss certain affairs pertaining to them pri-vately, thereby setting an interesting precedent which was maintainedduring the Greek presidency.

As for the development of the Headline Goal, two important events areworth mentioning. One was the launch of the "European Capability ActionPlan" (ECAP), which was conceived during the Belgian presidency andfinally materialised into a number of panels that are to formulate proposals

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for bridging the gaps detected following the definition of needs and avai-lable assets. It should be remembered that the results of this action plan,like those of the efforts to achieve the Headline Goal, are based on volun-tary contributions, and therefore depend almost entirely on the amount ofinterest nations show.

The other event is the project to set up a planning system in order tomove on from the now obsolete phase of the "Capabilities Conferences"whose purpose was to establish the Headline Goal. This system wouldinvolve the European Union adopting a procedure known as the"Capabilities Development Mechanism", which is similar to the one usedby NATO and should be ready from 2003. Developing it will require consi-derable determination and skill, as it relies on NATO and therefore on non-EU countries such as Turkey and the United States. Some last-minuteobservations made by Greece caused the document, which had beenagreed on and was ready for approval, to run aground. An excellent oppor-tunity to bring these efforts to a successful conclusion was thus lost,since, as was only to be expected, no progress was made during theGreek presidency as regards defence affairs.

Once again, the Greco-Turkish conflict also interfered with the effortsto equip the European Union with an appropriate military capability, forwhich it is essential to have reasonably easy recourse to certain assetsthat only NATO possesses. Ankara and Athens continued to take turns tothrow a spanner in the works up until the Seville summit.

It should be pointed out that both at this summit and at Barcelona,anti-globalisation movements were limited to little more than the usualdemonstrations; this is an interesting development if we compare thisbehaviour with previous events, though we should bear in mind theinfluence of the costly deployment of security forces on this change. Atany rate, the European councils held during the Spanish presidencymarked a turning point in this respect.

THE BRUSSELS SUMMIT (24 AND 25 OCTOBER)AND THE PRESENTATION OF THE WORK OF THE CONVENTION

The thorny issue of how to finance the enlargement of the EuropeanUnion was raised at the Brussels summit, with the knowledge that anyproblems that arose could question this operation. Surprisingly, the dis-credited Franco-German axis resumed its role as the Union's driving force

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and the two countries reached an agreement, despite their considerablydifferent initial stances. France wanted a system of financing that wouldnot affect farm subsidies, whereas Germany was keen to pay as little aspossible, for which the Common Agricultural Policy needed to be re-viewed. Indeed, the agreement between Paris and Berlin established thatexpenses deriving from this policy would be frozen from 2006 to 2013. Tomake up for this, the agreement mentioned a review of Britain's "rebate".This idea was naturally not to liking of the United Kingdom, which, in addi-tion to supporting a radical reform of agricultural policy, regarded itself asthe worst affected by this deal.

Even though the agreement involves the loss of certain support in thefuture, many countries came out in favour of it, including Spain, which wasaware that subsidies will inevitably have to be reviewed after 2007, butsatisfied that the negative impact of this reform on farmers will be minimal,as the resulting reduction will amount to only two percent and is perfectlyfeasible. Spain was also satisfied with the treatment of the structural andcohesion funds, given the extraordinary progress that has been witnessedtowards convergence and because, in principle, the current amount ofthese funds is guaranteed until 2007, though they are pending a reformproposal to be submitted by the European Commission in 2003.

Only a few days after the summit ended, Valéry Giscard d´Estaingreported on the ambitious work carried out by the Convention. The resultspoint to the drawing up of a Constitution proper, which is acceptable evento the British. Once again, one has the impression that Europeans will becapable of agreeing when it comes to the crunch, so much so that itseems certain that the most important decisions will not be left until thelast minute of the Intergovernmental Conference.

Another issue is the possibility of creating a European citizenship andestablishing a president. The idea of the latter seems to be supported byFrance, Spain and the United Kingdom and possibly Germany, providedthat the Commission were guaranteed substantial power, as the "smallcountries" wish.

Other major proposals that are gradually taking shape are the definitionof a single legal personality for the Union, the name of which has yet to bedecided, and the incorporation into the Constitution of the EuropeanCharter of Fundamental Rights, in order to afford this document—whichhas now been approved—an effective status and greater legal significanceas guarantor of these rights.

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A STRATEGIC YEAR FOR SPAIN

As expected, Spain was elected a non-permanent member of theUnited Nations Security Council. It will hold this position for two years from1 January 2003, that is, at a particularly delicate time when important deci-sions will need to be made on Iraq, the Western Sahara, the Middle Eastand the fight against terrorism.

The year began with the deployment of Spanish forces in Afghanistan.The projection of military power towards Central Asia and, at the sametime, towards several regions of the Balkan peninsula, constitutes yetanother operational and logistic challenge to the development of Spain'smilitary capability in the new post-Cold-War strategic landscape whosefoundations were rocked by 11 September.

As for Spain's closest neighbours, Morocco made a conscious effort todamage its relations with Spain, apparently in response to Madrid's posi-tion regarding the dispute over the Western Sahara. Spain has maintainedthe same attitude throughout and has always respected the UnitedNations resolutions. We should not rule out the possibility that this wasanother ploy to divert attention away from Morocco's internal problems bycreating others abroad and to mask its insufficient control of illegal immi-gration. This effort to mar what Spain wishes to be good and constructiverelations appears to turn a blind eye to facts as evident as the large andever-increasing number of Moroccan immigrants currently in Spain, thenearly eight hundred Spanish companies that are contributing to the eco-nomic development of the neighbouring country, the fact that our countryis the second biggest (and in some cases the largest) foreign investor inMorocco and the importance both Morocco and Spain attach to theircurrent levels of bilateral trade, in addition to the logistic support Spainprovides to the flow of over two million immigrants who cross Spanishterritory every summer on their way to Morocco from Central Europe.Other seemingly incoherent situations had previously been witnessed inMorocco's attitude to the European Union, such as the contradiction be-tween the country's interest in enjoying a closer relationship with the Unionand some of the related benefits, and the uncommunicative attitude of theRabat government in the fishing negotiations with Brussels.

This deliberate attempt to cause a deterioration in relations came to ahead when Morocco occupied a small islet (the so-called "Perejil" islet)near Ceuta, the apparent insignificance of which further underlined

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Morocco's intention to create problems. Spain responded to the occupa-tion by removing the troops who had raised the Moroccan flag on the islet.Previously, both the European Union and NATO had expressed their soli-darity with Spain and called for the immediate withdrawal of the Moroccansoldiers. This incident and the recalling of the Moroccan ambassador inMadrid, which had occurred months earlier without Spain following suit(the Spanish ambassador had remained in Rabat until the day Spanishtroops landed on the islet) merely illustrate the difficulties encountered by theMediterranean dialogue that Europe is promoting with such great interest.

This situation can only be explained by the current tension in theMuslim world. In this respect, by making a major human, logistic and eco-nomic effort for the benefit of Morocco and endeavouring to preservegood relations with this country come hell or high water and prevent futureundesirable conflicts in the Strait of Gibraltar, Spain does nothing but actin the interests of the West and, specifically, the European Union.

Also noteworthy were the joint efforts made by British and Spanishdiplomacy to settle the Gibraltar dispute, which had become untenable ina Europe that is building a political union, since this process must begoverned by fair play and has no place for an anachronistic relationship ofcoloniser and colonised country. What is more, the dispute not only raisedits ugly head in relations between the two countries, whose political lead-ers have shown many signs of their good understanding; it was also beco-ming a hindrance to agreements within Europe. Britain's wish to changethe situation was evidenced by the London government's firm stancetowards Gibraltar; however, after much of the way had been cleared andthe British had even agreed to a solution of joint sovereignty, the initial aimof settling the issue by summer 2002 ran into problems and had to bepostponed, and is still pending.

Regarding the problem of Iraq, from the outset the Spanish govern-ment openly supported the United States, as only befits a country likeSpain which suffers the scourge of terrorism and is a good US ally. Itsstance contrasted with that of most of the European nations, which, withthe exception of the United Kingdom, adopted a wait-and-see attitude.

As for home affairs, the Spanish Armed Forces completed their re-structuring into a fully functional organisation geared to facilitating forceprojection, and the system of air-force and naval regions was abolished.The main force, previously the Standing Force and Mobilisation Reserve,is now the Manoeuvre Force, the Land Force and the Operational Logistic

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Force. The Army Inspectorate General was also set up. Institutional repre-sentation will always be provided by the Armed Forces as opposed to therespective forces, and will be exercised by the functional commands ineach case. The island forces continue to have their own commands, andthose of Ceuta and Melilla are now joint commands.

Throughout the year Spain debated at length on a strategic defencereview, bearing in mind the post-11-September landscape, and an effortwas made to reach a pact between government and opposition, whosedifferences of opinion were limited to two affairs: some aspects of funding,and the total number of troops. Aspects such as capabilities, the defenceindustry and the funding of programmes were also studied and analysedto find practical solutions to the current difficulties. This would appear todemonstrate the growing interest in these matters, and not only in the mili-tary environment.

The end of September saw the launch of the frigate "Álvaro de Bazán",the first of the F-100s equipped with the Aegis system, marking the begin-ning of the implementation of the Navy's main procurement programme.The programme for Army attack helicopters, one of the most important ofthose deriving from the modernisation plans, received considerable impe-tus owing to the growing evidence that the Army needs such material assoon as possible. In the end the Spanish government decided on a com-bination of Eurocopter "Tigers" and Boeing "Apaches", reconciling politi-cal interest in participating in a European programme with the need per-ceived by the Spanish Army to have a proper attack helicopter, not just forcombat support. The Leopard 2E battle tank, which the Spanish Army willbe equipped with from 2003, was presented and the first batch of SikorskiSH-60B helicopters for the Navy frigates was delivered. The delivery of thefirst Eurofighters to the Air Force was postponed until March 2003, and itis not expected to be delayed any further, despite the accident suffered bythe prototype.

Spain's project to set up a High Readiness Headquarters (Land) atBétera (Valencia) brilliantly outshone the assessments made by the SHAPE(Supreme Headquarters Allied Powers in Europe), and in Novemberproved it had reached full operating capacity. All that remains now is forthe SHAPE to recommend to the Atlantic Council that it be designated aNATO Rapid Deployment Army Corps (HQ NRDC-S). This should happenwhen the organisation completes the review of its Force structure. Thenew Headquarters, which incorporates personnel from Germany, Spain,

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Greece, the Netherlands, Hungary, Italy, Poland, Portugal, Turkey, theUnited States and the United Kingdom, is proving the Spanish Army's abi-lity to rise to a challenge it had set itself and marks an important qualita-tive leap forward. The amphibious assault ship "Castilla" also passed itsinitial operational test to qualify as as a Maritime Headquarters for NATO.

In contrast, the project to trim the number of non-deployable NATOheadquarters, a drastic measure promoted by the United States, ques-tioned the permanence of the Retamares Headquarters (Madrid). However,Spain defended its HQ so insistently that in the end this project was notpresented at the Prague summit.

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CHAPTER THREE

CENTRAL AND EASTERN EUROPEAND EURASIA

CENTRAL AND EASTERN EUROPE AND EURASIA

By María Angustias Caracuel Raya

INTRODUCTION

2002 has been a particularly significant year for the Central andEastern European countries, for two basic reasons. On the one hand,because the negotiations for accession to the European Union (EU) en-tered their home stretch, and it was decided which countries will join theEU in the near future and, on the other hand, because the North AtlanticTreaty Organisation (NATO) reaffirmed its open-door policy at the PragueSummit in November, showing its commitment to conclude enlargementnegotiations with a group of countries from this vast geographic reason.This past "strategic year" can therefore be described as a "year of en-largement", much to the satisfaction of some of the countries examined inthis chapter and to the disappointment of others.

Spain has enjoyed an active and leading role in both enlargement pro-cesses, even though the circumstances have not been entirely easy.Indeed, it took over the EU presidency at a time when the world was stillsuffering the aftermath of the attacks of 11 September and in the grip of amarked economic downturn. These difficulties failed to prevent substan-tial progress being made towards building "More Europe"—the slogan ofthe Spanish presidency, which specifically addressed compliance withpolitical and economic criteria and the application of the acquis by thecandidate countries.

Indeed, the Spanish presidency aimed to consolidate, boost and legi-timise the current stage in the building of Europe. This was the purpose of

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the six major priorities established in its programme, which were in linewith the basic objectives of previous presidencies, namely: combatingterrorism in an area of freedom, security and justice; the successful circu-lation of the euro; giving impetus to the Lisbon process to achieve a com-petitive and dynamic European economy; enlarging the Union; externalrelations; enhancing Europe's role in the world and the debate on the futu-re of Europe.

These priorities were developed in the address given by the defenceminister, Federico Trillo-Figueroa, during the presentation of the goals forsecurity and defence matters on 10 January 2002. He specifically men-tioned the need to progress in relations between the EU and NATO andacknowledged the importance of transferring the good relations achievedin the practical sphere, particularly in the Balkans, to the institutional field.The Spanish presidency also placed special emphasis on reaching agree-ment on consultations with, and the participation of, candidate countriesand non-EU European allies, especially Russia and Ukraine, whose poten-tial contribution to future EU missions in times of crisis could be very con-siderable.

The Asian countries continued to progress towards capitalism anddemocracy, though they each, in their pursuit of development and secu-rity, show strengths and weaknesses. Although Communism is no longerthe main political force in these countries, traces of it are still found insome of their leaders, such as authoritarian central planning, state owner-ship of industry and a certain amount of corruption. Indeed, some of thesecountries are still governed by autocratic or repressive regimes that are sti-fling development.

At the same time, the United States is increasing its presence inCentral Asia and other nearby regions, owing mainly to the current cam-paign in Afghanistan, the new economic prospects the area offers and thepossibility of launching a fresh campaign in Iraq. Whereas America exer-cised its huge political, economic and military influence in Europe duringthe Cold War, in the 21st century the United States is steering its foreignpolicy in a different direction, giving priority to a new geopolitical land-scape where its security interests converge, and pursuing an overall stra-tegy that encompasses diplomatic, economic and military aspects.Therefore, at the dawn of the new century, it is proving to be the greatworld "hyper-power".

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THE BALTIC STATES, ON THE DOORSTEP OF THE EUROPEANINSTITUTIONS

The changes that the social, political, economic and military structuresof Lithuania, Latvia and Estonia have undergone in recent years willundoubtedly help integrate them into NATO and the EU. In this respect,relations between the Baltic states, the Atlantic Alliance and the EuropeanUnion continued to top the political agenda of these three northern coun-tries in the final stage that precedes full accession, as did relations withRussia.

The clear political will of the Baltic countries to join these institutionsand their efforts to apply the community acquis and reform their defencesystems are proving to be determining factors in the achievement of bothgoals in the short term.

Lithuania in particular holds that the best way of assuring its nationalinterests is through the collective solidarity that the European Union pro-vides. In this connection, the country has agreed to shut down the nucle-ar power station at Ignalina by 2009 and seek alternative energy sourcesin exchange for substantial aid from the Union. Lithuania and the Russianregion of Kaliningrad continued to co-operate, in the framework of theEuropean Union's Northern Dimension, in various areas such as the envi-ronment, energy, transport and inter border co-operation, and this is help-ing create a climate of confidence for its relations with Moscow.

Latvia has adopted a positive and dynamic approach to its negotia-tions for EU accession. It now boasts a thriving market economy and sta-ble microeconomic indicators. Nonetheless, corruption continues to because for concern, and the public authorities need to be equipped with thenecessary means to combat it. All in all, Latvia recognises that theEuropean Union is more than a union governed by market-oriented princi-ples and regards it as a union of common values that are applied acrossthe continent. Therefore, the strength of this Baltic state lies in its consoli-dated democracy, which is firmly committed to the principles that under-pin the working of the European institutions.

Estonia has moved closer to the EU and adapted its legislation to thatof Union in a similar manner. Its concern with achieving budgetary balancehas lowered inflation considerably and given rise to economic reforms thathave fostered privatisation, a liberal price policy and a moderate taxationsystem.

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But the most important thing about the Baltic states is that, althoughEU integration is turning out to be a long, complex and at times painfulprocess, these countries are aware of what the point of all this effort is.There is no doubt that their political and economic conditions and perse-verance in achieving the objectives they have set has placed them amongthe most prosperous EU candidates, thanks largely to the increased inflowof foreign capital, particularly from Sweden, Germany, Denmark and theUnited States.

In the security and defence field, the debate centred on the budgetaryrequirements for joining the Atlantic Alliance and on the application of theConventional Armed Forces in Europe (CFE) Treaty, which is regarded asthe bedrock of European security and was signed in Paris in 1990, whenthe Baltic states were still part of the Soviet Union.

One NATO criterion for new members establishes that the defence bud-gets should be maintained at around two percent of Gross National Product(GNP) in coming years. Furthermore, the Prague Summit held at the end ofNovember concluded the debate on the ratification of the adapted CFETreaty, as Russia was refusing to do so until the Baltic States undertook torespect the "spirit" of the agreement. In this respect, the Prague declara-tion invites the countries that are not parties to the treaty to ratify it as soonas it enters into force. Their accession, as the declaration underlines, will beessential to European stability and security and, more importantly, will reaf-firm the principle of the indivisibility of security by at last putting an end tothe idea of different "security zones" inside NATO, that is, states that havesigned and ratified the treaty (such as Poland) as opposed to those thathave not (such as the Baltic states). With the Prague declaration, theAlliance has reassured Moscow that the Baltic states will not be a placewhere conventional weapons are stockpiled on NATO territory.

CENTRAL EASTERN EUROPE: TORN BETWEEN HOPEAND THE UNCERTAINTY OF INTEGRATION

The Central and East European countries' relations with Spain and theEuropean international organisations were characterised by normality andconfidence as regards political, economic and trade matters, though cer-tain bilateral problems between these states dragged on throughout 2002.

Although NATO and the EU have both opted for large-scale or "big-bang" enlargement, not all the countries in this geographic region have

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been chosen to participate in both institutions. And although during itspresidency of the Union Spain gave considerable impetus to the EUaccession negotiations, only Poland, Hungary and the Czech Republic—full members of the Alliance—Slovakia and Slovenia have been chosen tojoin the Union, while Romania and Bulgaria will have to wait. Yet they willall be part of an enlarged NATO in the near future.

One of the factors that has drawn Slovakia to the Atlantic communityis the lure of Poland and the Czech Republic, namely the initiative to setup the headquarters for a Polish-Czech-Slovakian brigade at Topolcany(Slovakia). This force will be fully operational by 2003 and could thereforetake part in future NATO and EU peace-support missions. These countrieshave also intensified their relations with Hungary by signing aMemorandum of Understanding (MoU) in Slovakia on 30 May, wherebythey will co-operate in defence procurement issues, though all four coun-tries hope to harmonise their logistic and training capabilities even furtherand share defence expenses in the field of research and development.

However, as regards the political situation, the problems betweenSlovakia and Hungary dragged on owing to the law on the rights ofHungarian minorities overseas, which entered into force on 1 January2002. Slovakia continues to denounce the extraterritorial application ofthis law, which, so it claims, infringes European regulations on the protec-tion of national minorities. This led a meeting of the Visegrad group, sche-duled for early March, to be called off, though these four countries never-theless maintained that the spirit of the group was still alive.

Bulgaria, in contrast, continues to be the embodiment of good inter-eth-nic relations and in this respect could serve as an example for other coun-tries in the region. This is evidenced by the firm support the Turkish MinorityParty and the Movement for the Rights and Freedoms lend Simeon ofBulgaria's government. The restructuring of the country's armed forces isproving to be a huge financial and social burden since, although the num-ber of troops has been curtailed considerably—from 100,000 to the current60,000—it is expected to be further slashed to about 45,000 by 2004.

Despite these internal defence-related difficulties, Bulgaria remainsfirmly committed to regional security. This effort is manifested in threebasic aspects. First, the country continues to take part in the NATO-ledpeace support operations in the Balkans. Second, it is making the Burgasairbase by the Black Sea temporarily available to support the UnitedStates' antiterrorist campaign. Third, Bulgaria has reached an agreement

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with the United States to destroy some 100 Soviet-made missiles, whichit considers no longer possess the military value they had during the ColdWar, when they served the purpose of protecting the country's southernborder, particularly the area between the former Soviet bloc and the NATOcountries (Turkey and Greece). Recently, the Western countries had be-come concerned about the possibility of their being traded illegally andsold to weaker states under trade embargoes.

Similarly, Romania has taken part in operation "Enduring Freedom" andother NATO peace missions and has adapted its internal legislation inorder to pass the law on state secrets that the Alliance established as arequirement for joining NATO.

All these circumstances led NATO to accept Romania and Bulgaria ascandidates at the Prague summit. This will help strengthen the Alliance'ssouthern dimension. However, the equilibrium that the accession of thesetwo countries will afford NATO's southern flank contrasts with the imba-lance of the southern region of the EU, which failed to nominate them,though it does not mean that both international organisations will not con-tinue to constantly assess the tasks that candidates and non-candidatesmust fulfil on their path towards membership.

For example, the EU still considers that both countries should speedup their reforms, curb inflation and step up their fight against corruptionand is calling for efforts to be made in these aspects. At the same time,the countries must continue to make macroeconomic progress, maintai-ning their annual economic growth at around 3.5 percent. Once they haveachieved these goals, the Union will incorporate these candidates as soonas possible, though there is talk of 2007 as the year of accession.

SOUTH-EAST EUROPE: TORN BETWEEN CONSOLIDATINGDEMOCRACY AND THE SURVIVAL OF THE STATE

The elections in Serbia, Kosovo, Montenegro, Albania, Bosnia-Herzegovina and Slovenia have shown that the various political parties stillseek to consolidate democracy, despite the persistence of some radicalnationalist forces that are attempting to hinder the transition and thearmed groups that still use violence as a means of achieving their aims.

The region still poses some security risks. These stem from a numberof factors, such as illegal arms trafficking, lack of economic development,

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disintegration of state structures, the existence of religious and ethnicquarrels, organised crime and uncontrolled immigration. Indeed, the trans-national nature of the new risks has rendered solely national responsesineffective and makes the co-operation of international organisations suchas NATO, the EU and the OSCE essential.

The rivalry between Slovenia and Croatia, on the one hand, and be-tween Croatia and Bosnia-Herzegovina, on the other, deserves specialattention. Slovenia and Croatia have yet to solve some border problemsand are also engaged in a fishing dispute over Piran; the respective politi-cal leaders disagree as to each other's claims to the area. Furthermore,2002 saw a flurry of mutual accusations over the control of the Croatian-Bosnian border. This led to the intervention of the United Nations, whichordered the Serb border police to pull back several metres in order to easethe tension.

And while Croatia is more concerned about establishing close relationswith its Central European neighbours than the difficulties of democratisa-tion, Bosnia-Herzegovina remains focused on solving its problems athome. This can be illustrated by two examples. First, in June Croatiajoined the CENCOOP (Central European Nations in Peace Support) initia-tive, in which Austria, Hungary, Rumania, Slovakia, Switzerland andSlovenia take part. Second, the security of Bosnia-Herzegovina continuesto depend on the presence of the Stabilisation Force (SFOR) led by NATO,which decided in spring 2002 to trim the size of SFOR from 19,000 to12,000 troops. This move was designed to make personnel available forother peace missions, such as operation "Enduring Freedom".

During the Spanish presidency of the Union, the EU also undertook tocarry out the first police mission (EUPM, European Union Police Mission)in Bosnia-Herzegovina from 1 January 2003. This force, which will com-prise 470 police and 70 civilian experts, will continue with the work of theUN-led IPTF (International Police Task Force) and will be open to contri-butions from third states. The EU has thus joined—but on this occasion inpractice—the UN's peacemaking efforts as recommended by the BrahimiReport in 2000. It is hoped that the determination the political leaders andpeople of this country have shown over these past months will enable thisgoal to materialise on the ground and contribute as far as possible to per-manent peace for this republic.

Significant steps are being taken in this respect. For example, 2002saw the completion of the amendment of the constitutions of both

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states—the Serbian Federation and the Muslim-Croat Federation—inaccordance with the Constitutional Court judgments calling for an identi-cal status for the different peoples living in Bosnia-Herzegovina. And themeeting in Sarajevo of the presidents of Bosnia-Herzegovina, Croatia andthe Federal Republic of Yugoslavia, who committed themselves politicallyto trying to overcome their past differences by centring more on the futu-re and facing the challenges of European integration, was more than amerely symbolic gesture.

In view of the security developments in this republic, the Council ofEurope welcomed Bosnia-Herzegovina in April. Meanwhile, the EU stillconsiders that its possibilities of joining the Union basically hinge on itsdemocratic development and on the consolidation of the rule of law.

The Union expressed a similar opinion of the Former Yugoslav Republicof Macedonia, which called general elections almost a year after the signingof the Ohrid peace accord. Although the Slavs overthrew the nationalistgovernment and placed their confidence in the "Together for Macedonia"coalition, they have yet to rise to the challenge of clamping down on the ille-gal armed gangs operating on their territory, which were responsible for aconsiderable number of violent incidents throughout the year.

Nonetheless, the presence of NATO-led international troops in the"Amber Fox" operation is proving an essential means of preventing awidespread outbreak of violence in this former Yugoslav republic.Although its mandate expired at the end of October, the North AtlanticCouncil decided to extend it for a limited period until 15 December, whilethe EU has expressed its wished to relieve the Atlantic Alliance in this mili-tary operation. Ideally, for this to work, an agreement needs to be reachedon use of the Atlantic Alliance's assets and capabilities in operations ledby the European Union—a process known as "Berlin Plus".

In any event, what needs to be done is to prevent South-East Europefrom becoming a second home for armed gangs and terrorist cells such asal-Qaeda from operating from this region. There is no doubt that terroristsand criminals thrive on chaos, and what NATO and the EU intend to do isto lay the foundations for stability and prosperity, for which they need towork closely with the population and its political leaders.

This same goal is pursued by the Stability Pact for South-East Europe,which operates under the aegis of the Organisation for Security and Co-operation in Europe (OSCE), and is co-operating with NATO and the EU in

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three areas: raising the awareness of the population by providing informa-tion; fostering regional contacts at various levels; and developing mecha-nisms to weaken the logistic capabilities of the terrorist groups.

This co-ordinated and integrated approach to the problem is provinghelpful—though it has yet to provide a solution—in all aspects of regionalsecurity. It is particularly useful for keeping check on exports of weaponsto third countries, including Iraq.

Indeed, since NATO disclosed in October that the governments of theFederal Republic of Yugoslavia—Serbia and Montenegro—and Bosnia-Herzegovina were failing to comply with the arms embargo on Iraq, suspi-cions have been raised about both countries and, particularly, about eightdefence-related companies. This has led to the removal from office ofseveral political and military leaders.

Although the exact nature of the contacts between these republics andthe Iraqi government has not come to light, we should recall that co-ope-ration between them dates back to 1976, when companies of the formerYugoslavia helped build military installations, surface-air missile systems(SAMs) and radars, among other things. Subsequently, according to somesources, there were indications that Iraq had asked the Yugoslav army todisclose its tactics for confronting NATO in 1999. On the other hand, thesame sources reported that Belgrade has co-operated with the US depart-ment of defence, providing detailed information on Iraqi air defence sys-tems and the bunkers built under Yugoslav supervision.

This apparent contradiction between those who wish for a closer rela-tionship with the West and those who still regard NATO as the enemy willprobably be overcome in the near future, as the struggle for power be-tween the federal president, Vojislav Kostunica, a conservative nationalist,and the Serbian prime minister, Zoran Kjindic, who is in favour of moreradical changes, draws to an end, though this does not necessarily meana return to the aggressive nationalism of the Milosevic period. In this con-nection, it is thought that the two rivals have been supplying sensitiveinformation in order to harm each other in the election process currentlyunder way in Yugoslavia, and further revelations on the links between theYugoslav government and the Iraqi regime are therefore expected.

Relations between the two republics that make up the Federal State(Serbia and Montenegro) have moved onto a new plane following theagreement to change the name of the federation, which is to be called

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Federal Republic of Serbia and Montenegro at least for the next threeyears, and the decision to draw up a new constitution that must be ap-proved by the parliaments of both republics. Therefore, the "new union" en-sures that both states will continue to exist as part of a single, albeit looser,federal structure in the near future.

As some political leaders have pointed out, the best exit strategy is anentry strategy, that is, a strategy of joining the European institutions, as itsadvantages outweigh the disadvantages. This message, interpreted nega-tively, has yet to take root in Albania, where the Democratic Union forIntegration, the party of the former guerrillas who attempted to rise up inarms against the established democracy, recently won the election. If tothis we add the emergence of a new organisation in Europe, the UnitedNational Front of Albania, which is attempting to group together theAlbanian diaspora overseas—mainly in Switzerland, Denmark andGermany—and unite the Albanian territories in the region, it is likely thatthis organisation will end up supporting the Albanian National Army, whichbacks the idea of a "Greater Albania" (also called "Chemeria") that wouldinclude the whole of Kosovo, part of Serbia and part of the formerYugoslav Republic of Macedonia, western Greece and almost half of theRepublic of Montenegro.

Taken in the positive sense, the idea of economic integration can helpbring new prospects of co-operation between the countries in the region,particularly the signing of new free-trade agreements. In particular, men-tion should be made of the agreement between Albania and Croatia, pro-moted by the Stability Pact, which will help boost the economy and deve-lopment of both countries. Sectoral co-operation between the differentstates in the region will help achieve greater social well-being and improvetheir chances of joining the European institutions. This will enable them todispel the uncertainties of the most recent past.

THE COMMONWEALTH OF INDEPENDENT STATES: IN PURSUITOF A NEW STRATEGIC FRAMEWORK

Two events continued to influence the strategic agenda of the coun-tries in this geographic region. On the one hand, 11 September 2001 hasled to a "new alignment" of these countries with the international commu-nity in the fight against terrorism, although some loyalties were divided inthis respect, as we will see further on. And, on the other, 13 June 2002 saw

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the permanent end of the Anti-Ballistic Missiles (ABM) treaty, which wasregarded as the cornerstone of strategic relations between the two majorCold-War superpowers during its almost 30 years of existence.

However, despite fears of the repercussions of both developments onthe Atlantic-Eurasian community, it became apparent that "there is life"after these events and it has been possible to establish a new understan-ding between the US administration, Europe and the Slavic and CentralAsian republics of the former USSR. In this respect, the contribution ofWestern institutions to stability in the region is proving proportional to thehelp they are receiving from this region, particularly in fighting terrorism.

The Russian Federation as a "Major Power"

During 2002 Russia presented itself as a democratic country whosefuture lies in Europe. In this connection, its political leader, Vladimir Putin,attempted to take the necessary steps to steer his country in that direc-tion, though with contrasting results.

On the one hand, the Russian Federation not only agrees with the UnitedStates' theoretical analysis of the new security threats such as terrorism andthe proliferation of weapons of mass destruction, but also on the practicalneed to step up co-operation in as many areas as possible. Accordingly, thenew NATO-Russia forum, established on 28 May and called the NATO-Russia Council, constitutes a new version of the Joint Permanent Council(JPC) and represents a new chance to increase co-operation between the20 states, on an equal footing, in different areas relating to security anddefence. This new strategic partnership between NATO and Russia is there-fore based on the joint responsibility of adopting joint decisions. And al-though the Federation continued to regard the enlargement of the Allianceas an internal NATO affair, Russia eventually came round to the opinion thatNATO decisions should not be adopted without its contribution.

Another question that has affected transatlantic relations, and Russiain particular, is the end of the ABM treaty and the agreement betweenAmericans and Russians to reduce strategic nuclear weapons. The fact isthat this new situation has not given rise to much international alarm, eventhough it grants the United States greater freedom of action to develop itsmissile defence initiative: an ambitious system that seeks to ensure, assoon as possible, the protection of American territory and of troops dis-placed overseas, including those of the allied and friendly nations.

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Despite some criticism that doing away with the ABM treaty wouldunleash a new arms race and that the dismantled nuclear warheadswould be stockpiled instead of destroyed, the parties began to settletheir differences over the second Strategic Arms Reduction (START II)treaty, and agreed to work towards the new START III Treaty, which willestablish a ceiling of between 2,000 and 2,500 strategic nuclear wea-pons for each party by 31 December 2007 and will include measures toencourage the transparency of inventories and the destruction of strate-gic nuclear warheads. Although Russia proposed an even greater reduc-tion (1,500), the United States was quick to object. In any event, theSTART III negotiations continue to depend on the Duma's ratification ofSTART II.

Europe remains more concerned about the situation in Chechnya,which came to a particularly ugly head when Chechen terrorists took theDubrovka Theatre in Moscow with 800 people inside. The incident con-firmed a reality—the deterioration of relations between the Moscow aut-horities and the Chechen pro-independence groups, which are threateningto spread the conflict to other Russian republics such as Ingushetia andeven Georgia if Russia continues to clamp down on the Chechen groups.Indeed, the dangerous parallel between the actions of the Federal troopson Chechen territory and the assault on the theatre in Moscow has beenpointed out on several occasions.

The European Union continues to support Russia's territorial integrityand at the November summit agreed on a plan for strategic co-operationwith Russia to combat terrorism. The agreement between Europol and theFederation to exchange information on the movements of individual terro-rists or terrorist groups or organisations and to control their financialresources should also be regarded in this light.

As for military co-operation, mention should be made of the agreementreached months earlier at the Seville Summit on consultations and co-operation between the EU and Russia in the field of crisis management,including the appointment of an officer to the EU Military Staff duringperiods of non-crisis. However, should a crisis arise, Russia may contri-bute to the Union's crisis-management operations and participate fully inthe planning stage, even if NATO assets and capabilities were required.The EU, though the Committee of Contributors, will likewise guaranteeRussia's participation in the operation with the same rights and obligationsas the other participants.

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The Russian Federation's wish to take part in the continental securitystructures contrasts with the tricky situation of its army, which, without yetabolishing compulsory military service, will attempt to further profession-alise certain vanguard units and concentrate on combat and counter-terro-rism operations. The Plan announced for 2004-2007, to be drawn up bysenior defence and foreign-affairs officials, will involve creating a core ofprofessional soldiers for Infantry, paratrooper and Marine Infantry units.Mustering funds and managing to attract the necessary personnel are themain goals this military reform should pursue.

Belarus: another "failed state"?

Many question marks continue to hover over the future of this Slavicrepublic, which displayed severe democratic deficits in 2002. In thehuman-rights field, in particular, there is still a need for a moratorium onthe death penalty, greater independence for the judiciary and a law on theombudsman. Furthermore, the existence of a plural democracy calls forrespect for political, religious and cultural diversity, and this includes res-pect for freedom of expression and non-persecution of political leaders.However, the latest measures adopted by the Belarussian parliament,such as the law on Freedom of Conscience, weakens religious freedom inthis country and lays down strict government controls on religious organi-sations, subjecting them to sanctions in circumstances that are not de-fined in the law.

As a result, the EU and OSCE have reiterated their concern about theinternal situation in Belarus on very many occasions, particularly whenOSCE noted the failure of the Belarussian authorities to show a positiveattitude by allowing the Minsk Group to resume work. Both institutionsattach crucial importance to these events, as they are preventing thecountry progress towards consolidating democracy and, accordingly,towards economic and social progress.

In the field of security, we should consider the future repercussions ofthe agreement signed by Belarus and Russia on 16 April on the UnionTreaty of 1999, which envisages a joint defence policy for both countries.The new agreement includes a decision to merge the Armed Forces in theframework of the Russian-Belarussian Union in the long term.

The political developments Belarus may witness in the coming years,spurred on by a more democratic Russia and a Europe committed to its

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stability, could speed up its transition to democracy. However, we shouldnot rule out the possibility that the Minsk authorities may continue withtheir internal introspection, which could have dire consequences for acountry located in the heart of continental Europe.

Transition in Ukraine

The parliamentary elections held in Ukraine in May were consideredessential and followed with much expectation by the Western institu-tions, whose co-operation with the republic depended to an extent onthe results. Although the pro-Western opposition party led by formerprime minister Victor Yuschenko emerged victorious, the internationalobservation mission detected some flaws and for the time being wemust wait and see whether democracy manages to take root properly inUkraine.

Nonetheless, the country appears to enjoy a sounder multilateral posi-tion, as it continues to openly defend two major strategic priorities: closerlinks with the European Union and a strengthening of its distinctive part-nership with NATO. And the reverse is true: all the European internationalorganisations and member states have an interest in seeing an internallystable Ukraine as the pipelines conveying oil from the Caspian Sea to theWest cross its territory.

Like Russia, Ukraine took a significant step forward at the SevilleEuropean Council in June, when an agreement on the types of consulta-tion and co-operation between the EU and Ukraine on crisis managementwas presented. This reinforces the idea of the Slavic country's role aspotential contributor to EU-led operations.

In addition, a month earlier Ukraine had expressed its willingness tojoin NATO in the long-term future. This announcement, which marked theend of "Ukrainian neutrality" at a time when the Alliance and Russia werebeginning to settle their differences over enlargement, met with Moscow'sdisapproval and eroded Russia's tolerance of NATO's enlargement to theformer Soviet bloc.

Even so, NATO and Ukraine have stepped up their co-operation, basi-cally in two fields: the reform of the Ukrainian Armed Forces and thecountry's contribution to peacemaking missions in the Balkans and thestrategic transport of European troops to Afghanistan.

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In this connection, Ukraine approved the national programme for co-operation with NATO 2001-2004, as well as reaching an agreement withNATO on the Partnership for Peace (PfP) Funds. The programme,launched officially in July, will involve the destruction of 400,000 anti-per-sonnel mines, while the agreement, signed in December, will enable133,000 tonnes of munitions and one and a half million short and lightweapons to be destroyed. Both initiatives are real proof of NATO's supportof a defence reform in Ukraine.

Meanwhile, the Slavic country continues to contribute to SFOR andKFOR peace missions in the Balkans and its Antonov aircraft are playing anessential role in the strategic transport of European forces to Afghanistan.This co-operation was reinforced by the signing of a MoU on Host NationSupport (HNS) with NATO, whereby both parties will use their assets andcapabilities for crisis management exercises and operations; this willundoubtedly go hand in hand with greater political and military co-operation.

Nonetheless, NATO has criticised Ukraine for the supposed sale of airdefence radars to Iraq in 2000, and considered its arguments on co-ope-ration with the Iraqi regime to be insufficiently grounded. This led to fric-tion during the recent meeting of the NATO-Ukraine Commission held inPrague in November. Although Ukraine has expressed its willingness toclarify this matter, it does not consider it appropriate to supply the nameof the countries to which it sells military equipment, and this issue will con-tinue to spark political debate over next few months. However, it is notexpected to influence military co-operation to a great extent, bearing inmind the sound relationship that has developed between NATO andUkraine over the past few years and both sides' huge interest in reinfor-cing their mutual relations.

Moldova and its pursuit of a national identity

2002 may be regarded as a year of regrets and reproaches for theRepublic of Moldova. As regards home affairs, the country, which declareditself to be neutral in the 1994 constitution and therefore does not take partin the CIS's military structures, has still not managed to settle the problemof the secession of the Russian-speaking region of Transdnistria, whoseauthorities are hindering the full application of the adapted CFE treaty bythe end of this year with their attitude, despite the financial and the orga-nisational support of the OSCE.

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Indeed, they have yet to reach an agreement with the Moscow autho-rities on the total withdrawal of military equipment from this region, mainlyfrom the northern base in Cobasna. The region is reluctant for Russiantroops to withdraw until the question of Transdnistria's political future inMoldavia is settled; besides, it regards them as guarantors of stability inthe region. Therefore Russia continues to exceed by far the equipmentlimits established in the adapted CFE treaty in view of the possible needto resort to force. The Moldovan authorities also faced fresh criticism fortheir failure to protect the national minorities in Transdnistria.

In the regional context, Moldova's role in GUUAM, an initiative in whichit participates together with Georgia, Ukraine, Uzbekistan and Armenia,continues to be precarious. In fact, at the latest meeting in Yalta, the pre-sident of the Republic, Vladimir Voronin, said that his country wasseriously concerned about the feasibility of this organisation. In his opi-nion, GUUAM has yet to establish its position in the dialogue between theEU and CIS in order to contribute to the process of global integration.However, the results of the co-operation within GUAAM are out of keepingwith the declarations made by the organisation. This has caused theMoldova to feel like an "observer" country rather than a full member, owingparticularly to its weak economic potential. An example of this was itspractical exclusion from the debates on the project to transport oil fromthe Caspian Sea.

The Caucasian republics and their stagnant conflicts

Two serious problems continue to affect Georgia, Armenia andAzerbaijan and are hindering their development. On the one hand, thesecessionist movement in Georgia and this Republic's relations withMoscow and, on the other, the conflict over the territory of Ngorno-Karabakh.

Tension in Georgia heightened when this country complained thatRussia had violated its airspace and even bombed towns in the north, cau-sing major damage to civilian property. The source of the sour relationsbetween Moscow and Tblilisi is Russia's accusation that Georgia is beco-ming a haven for Chechen terrorists. In August the EU even adopted astatement expressing its concern about the action of Russian aircraft inthe Caucasian country, at the same time appealing for respect for its terri-torial integrity and calling for a spirit of transparency and co-operation to

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tackle the security problems affecting both countries. These actions havemerely hindered the negotiations aimed at finding a solution to the deploy-ment of Russian forces at the Gudauta, Batumi and Akhalari bases, as thedeadlines for dismantling them in 2002 were not observed.

Nor has any substantial progress been made in settling the conflictover the Armenian enclave of Ngorno-Karabakh in Azerbaijan, eventhough Russia, France and the United States continued to strive for a solu-tion, in which both republics must participate. The OSCE was evenblamed for failing to put an end to the conflict, as it is now ten years sincethe Minsk group was set up. Even so, the pan-European organisationcarried on with its frantic attempts to bring together representatives fromthe governments and societies through the non-governmental organisa-tions of both republics to try to establish a goal to be pursued throughoutthe region, including the Ngorno-Karabakh: guarantees of freedom of reli-gion and information, which are still glaringly absent from the Caucasus.All in all the OCSE continues to advocate dialogue and mutual understan-ding as the basis of relations between the two republics.

The Central Asian republics: new demands and security needs

The Central Asian republics are a clear example that the expectationsof a fast democratisation of the Asian part of the post-Communist blocwere too high. However, democratisation continues to be essential to theirexpansion and stability, as although the states are normally treated as asingle entity, they are a number of countries that are located at the cross-roads between East and West and whose loyalties are therefore divided inaccordance with their diverse security interests.

While Kazakhstan and Uzbekistan are striving to achieve leadership inthe region through their respective security agreements—the formerthrough the Collective Security Treaty (CST) (1) dominated by Moscow andthe latter through GUUAM, established to counter Russian influence in theCIS—Turkmenistan continues to pursue a policy of neutrality and does notbelong to any CIS or regional initiatives such as the Shanghai Co-opera-tion Organisation (SCO) of which all these countries and China are mem-bers.

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(1) Kazakhstan, Kyrgyzstan, Tajikistan, Armenia, Belarus and Rusia are parties to the CST.

However, all these multilateral structures lack the clout required tosecure their member states significant weight in the region, and the coun-tries will therefore attempt to achieve this by making the most of the rivalrybetween the US and Russia. However, although Russia is unlikely to severall its links with the Central Asian states, the United States is taking advan-tage of their political, economic and military potential to strengthen its tieswith these countries, making the most of the new post-11-Septemberinternational context.

In general, it can be argued that the situation in the region is relativelystable. The more alarmist scenarios of a possible "spill" of the influence ofthe Taliban and al-Qaeda into these countries as a result of the war inAfghanistan have failed to materialise owing to the determined action ofthe international community and the support the of local governments.

Nonetheless, these republics' contribution to the US-led Operation"Enduring Freedom" was motivated more by their internal instabilitycaused by the presence of radical Islamic groups—such as Hizb ut-Tahrirand the Islamic Movement of Uzbekistan (IMU)—and economic downturnthan by international solidarity.

In this respect, the activities of both guerrilla groups in the region hasnotably diminished as the US has increased its presence at the militarybases in Uzbekistan (Khanabad and Kokayda), Kyrgyzstan (Manás) andTajikistan (Dushambé and Kylyab). For the time being, the US has pro-mised to modernise the former Soviet bases; this will cost its coffers be-tween 200 and 250 million dollars for each base.

The military co-operation between the US and the Central Asian repu-blics will be highly cost-effective if access is guaranteed to the region'smajor hydrocarbon deposits (petroleum and natural gas), particularly in theCaspian Sea. The Bush administration is pursuing this goal by collabora-ting with the authoritarianism regimes in Asia, and this will undoubtedlylead to immediate tension between Moscow and Washington.Furthermore, if America manages to consolidate its presence in thesecountries in the future and the situation in Afghanistan stabilises, it willreinforce its privileged position in Asia relative to Russia and also with res-pect to China, its main trade rival, which will require huge energy resour-ces in future to continue its economic development.

Analysing the situation on a country-by-country basis, the authoritiesof Kazakhstan, the republic located furthest away from the current scene

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of conflict in Afghanistan, has pursued a policy of centralising power,strangling any manifestation of freedom in the media. This not only violatesthe country's constitution but also many international agreements signedwith the OSCE and EU, such as the partnership and co-operation agree-ment. In contrast, the country has continued to diversify its foreign anddefence relations with the two giants, China and Russia, and more recentlywith the United States, whose assistance is at an initial stage and is limitedto military instruction and training the republic's armed forces in anti-terro-rist techniques.

Kyrgyzstan, for its part, is a small country with an enormous potentialto develop its hydroelectric production and generate the necessary in-come to meet its needs. It is calculated that two dams would provide upto 2,200 MW of electricity, enabling the republic to increase its indepen-dent energy production and to export energy to China, Uzbekistan andother neighbouring countries. These dams could furthermore help rationa-lise the use of water in the region. On the other hand, the country conti-nues to depend on Russian military aid, although US aid, aimed mainly atimproving the country's border management, looks set to increase signifi-cantly in the next few years.

Tajikistan, which has endured a civil war and is Russia's main strategicpartner in the reform of its modest armed forces and controlling its borderwith Afghanistan, is keen to co-operate at a regional level in stemming themajor threats such as drug trafficking and transnational radical Islamicmovements. It therefore hosted a set of military exercises known as"Antiterror 2002", which brought together forces from Armenia, Azerbaijan,Belarus, Kazakhstan and Russia.

Uzbekistan continues to display major regional ambitions, based on itsarmed forces—the best equipped in the region—which it continues tostrengthen in order to protect against possible uprisings and as a meansof combating regional terrorism of the IMU.

Unlike those of Uzbekistan, Turkmenistan's armed forces are charac-terised by a low combat capability, flagging morale and lack of equipment.However the efforts of their respective presidents, Messrs Karimov andNyazov, to keep the extremist movement in check, has led both govern-ments to be regarded as the most antidemocratic in Central Asia, sincethey have used the war against terrorism as an excuse to try to rid them-selves of their main political dissidents at home.

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Nonetheless, the main shortcoming of the Asian countries is the lackof regional co-operation mechanisms for tackling regional problemscollectively.

From the economic point of view, these countries, with the exceptionof Uzbekistan, are on the verge of collapse, and the flourishing drug tradecontinues to be their main source of income. Unless economic develop-ment is achieved in the region, extremist political and religious movementsmay continue to gain ground.

Although Russia and the Western institutions have stepped up theirindividual assistance to the Asian states, there is a need for an internatio-nal organisation to set in motion a regional development programme tochannel the efforts of the United Nations, the OSCE, the EU and NATO anddo the utmost to co-ordinate activities in this geographical area.

While the Stability Pact for South-East Europe, directed by the OSCE,is benefiting not only the countries directly affected by the conflict arisingfrom the disintegration of Yugoslavia but all the countries in the region, thenew Stability Pact for Central Asia should co-ordinate in the long-term theco-operation efforts of the international organisations (including the WorldBank) to reconstruct this region, which was directly affected by theAfghanistan crisis. Accordingly, at the Eurasia Economic Summit in April,the European Bank for Reconstruction and Development (EBRD) acknow-ledged the critical importance of co-operation between the five countriesin areas such as trade, transport, energy and water. All in all, although theregion shows great development potential, the level of integration is insuf-ficient and this continues to cause a certain amount of concern.

In the field of security, the CST Meeting in Moscow on 14 May 2002marked the transformation of this multinational co-operation initiative intoan organisation. The Collective Security Treaty Organisation (CSTO) willprovide a new legal basis for the new structure. However, the most signi-ficant headway was made when President Putin expressed his wish for thenew organisation to co-operate with other international organisations suchas NATO and the SCO to combat the new threats. Similarly, the summit ofthe latter, held in St Petersburg one month later, gave fresh impetus to theSCO, as the member states signed a charter providing a new legal basisand reinforcing co-operation in security matters.

Nonetheless, we should not forget that the Asian states remain vulne-rable to the possible actions of the IMU and al-Qaeda, and that the Armed

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Forces, mainly weak and hungry for reform, continue to seek the supportof regional and extra-regional powers, basically the US. However, the fra-gility of their economies continues to hinder their wish to replace theirobsolete military equipment and Soviet army weapons systems withmodern ones, hence the importance of financial compensation for theirmilitary co-operation.

SPAIN'S CONTRIBUTION TO STABILITY IN EURASIA

The fight against terrorism, peace missions and the fostering of confi-dence and security measures have been the major priorities of Spain'sdetermined effort to contribute to the peace and stability of the Eurasianregion. This has led it to undertake action simultaneously in several multi-lateral co-operation frameworks, in theatres that are geographically veryfar apart, from the Balkans to Asia.

Within the EU, at the Seville European Council in June, Spain managedto press for an important declaration on "the contribution of FCSP, inclu-ding foreign, defence and security policy, to the fight against terrorism". Inaddition to adopting a global approach to the problem of terrorism, thedeclaration established clear courses of action for its member states andnew guidelines for their relations with "third countries", most of which arelocated in this geographical area. The declaration therefore expresses theUnion's intention to centre political dialogue with third countries on com-bating terrorism, non-proliferation and control of weapons; to help thembolster their ability to respond effectively to the international threat ofterrorism; to include anti-terrorist clauses in EU agreements with thirdcountries; and to reassess their relations with these countries in the lightof their attitudes towards terrorism and take appropriate measures as aresult.

Spain also continued to take part in NATO-led peacemaking missionsin Bosnia-Herzegovina (SFOR) and Kosovo (KFOR), thereby contributingto a whole host of missions ranging from the implementation of the peaceaccords to the maintenance of law and order and the performance ofhumanitarian tasks. In view of the satisfactory development of security inthe region, our contingent serving in the Multinational Division South-East(MND-SE), specifically the Engineers and Marine Infantry units, wastrimmed substantially. Also, as part of operation "Enduring Freedom", ledby the US, Spain belongs to the international coalition against terrorism.

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Spain's presence in Asia can be witnessed in Manás (Kyrgyzstan), whereit deployed tactical air transport (a C-130 with 50 troops), and two armyCOUGAR helicopters, together with 55 men, in addition to its other navalassets, a medical unit and liaison officers deployed in headquarters andthroughout the conflict zone.

Finally, within the OSCE, Spain hosted an important seminar inFebruary which brought together many representatives of this organisationto debate on an issue that affects the whole of Europe and Asia: the pro-tection of water quality. The seminar, held in Zamora, helped raise aware-ness of the factors that can potentially destabilise the economies andenvironments of its member states. The Spanish institutions likewise re-ceived parliamentary delegations from Yugoslavia, which showed particu-lar interest in the functions and tasks of the ombudsman.

All in all, through a better understanding of the experiences and cha-llenges facing our societies, new relations can be established between thedifferent states in this vast geographical region. Spain's external action isoriented towards this goal.

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CHAPTER FOUR

THE MEDITERRANEAN

THE MEDITERRANEAN

By María Dolores Algora Weber

2002 was characterised by the aftereffects of 11 September, whichwere experienced in all areas of the world. The Mediterranean was noexception. On the contrary, it was a major player and witness to the newdevelopments in the world order.

During the year, the Islamic civilisation—its states and peoples—becamethe focus of attention and, indeed, on many occasions a scapegoat for allthe dangers that threaten international security. In this connection, we havewitnessed a progressive manifestation of the aftermath of the attacks onNew York both in the southern Mediterranean, which is home to the MuslimArab world, and, owing to the obvious link, in Muslim Asia as a whole.

The initial impact was on the Mediterranean states' perception of eachother. Mistrust at all levels was the most immediate reaction witnessedduring the months following the attacks. However, the initial commotiongave way to a second effect: concern with the need for a repositioning inthe Mediterranean. For a reassessment of the values and aims we pursuein this strategic area, in both north and south. For an approach that ena-bles us to identify situations and adopt stances on the broad spectrum ofrealities in the Mediterranean, particularly the south. In the so-called worldof "globalisation" the need has become more evident than ever to diffe-rentiate and gain knowledge in order to avoid undoing the progress wehad achieved, or at least mapped out as goals, throughout the nineties.

Establishing closer ties with the Arab world is no longer just an essen-tial step for developing Mediterranean relations. During the year this issuemoved onto a higher plane and is now an urgent requirement for the main-

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tenance of security and stability in the Mediterranean, in Europe, and in theinternational order.

We will therefore analyse how some of the latent disputes in the MuslimArab world have worsened and how traditional attitudes and allianceshave changed.

2002 was, therefore, a year of confusion, reorientation and reaction.The circumstances we have witnessed in the Mediterranean are a goodillustration of this new reality.

The eleventh of September evidenced the need for America to givenew direction to its action in the Arab world. However, far from rethinkingits policy, it has adopted a firm and diplomatically aggressive stance,which, despite earning President George W. Bush support at home, hasdisconcerted international society, which is perplexed at what some arestarting to refer to as the "Balkanisation of the Arab world".

Furthermore, in view of the developments in these past months, it hasalso become clear that Bin Laden and al-Qaeda have not only harmedUnited States but the whole of international society and, very particularly,the Islamic world, which has been on the receiving end of moral judgmentsfrom all sides since then.

In this respect, the different European states have played an essentialrole. The Mediterranean conflicts have shown up the cracks in theEuropean Union. The positions that were unveiled, at least in the formaldeclarations, revealed the weakness of the Foreign Security and DefencePolicy. However, despite this flaw, the European governments have madea significant contribution to international stability. We should recall, merelyby way of an introduction, that the United States failed to receive theunconditional support it may have expected from its European allies in thetwo most important Middle Eastern conflicts. Following the worrying deve-lopments in the Palestinian territories, it was precisely the European Unionwhich, in the first months of the year, forced diplomacy to set up the inter-national "Quartet", thereby preventing the US from acting unilaterally.Similarly, the European states brought pressure to bear to ensure that ope-rations relating to Iraq respected the decisions of the United NationsSecurity Council.

The European governments may not enjoy a strong position on theworld stage, but they certainly seem to be showing signs that our strate-gic interests lie in the Arab world as opposed to against it.

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During the past months, understandably, we have witnessed a publicdebate triggered by the reactions of the different European societies:opposition to versus co-operation with America's international policy. Itseems obvious that Europeans support a policy geared chiefly to comba-ting terrorism; however, major changes aimed at curbing the hegemonicaction of the Washington government are occurring. In this respect, theEuropean Union is perhaps one step ahead of United States as regardsawareness of the new international reality.

One has the impression that the United States, which won the Cold War,has been showing signs of losing the post-war since 11 September. It seemsto be entrenched in a traditional concept similar to "containment policy" anddoes not realise it has slipped behind and is now out of step with develop-ments in international relations this year. Although the White House ispreaching that the danger and real threat do not lie in states themselves butrather in terrorism, America does not always act in accordance with thismessage. Mr Bush continues to view the world order in terms of the MiddleEastern conflict and this is not going to allow him to combat violence.

The attacks perpetrated by al-Qaeda, together with the US's positionon Iraq and Palestine, is speeding up the "awakening", the reaction of thesocieties in the region. We are witnessing how the Arab peoples from theMasreq to the Maghreb are increasingly questioning their own govern-ments in some way or another—from intifada to the polls. This year thegap has widened between Arab civil society and a political class withwhich it does not identify. This has not escaped the notice of the Arabgovernments which, at least outwardly, have changed some of their inter-national positions. A special and significant case is Saudi Arabia, whichhas so much influence in Asia and the Middle East.

The only way to address the situation of the Arab world, which livesaround the Mediterranean but also in Europe and the United States, isthrough mediation. We have no choice but to overcome all the prejudicestriggered by 11 September. In this connection, the reaction to these trau-matic events urgently needs to be consolidated in the Mediterranean,which has become the "test tube" of international society.

This does not mean we should deny the existence of the terrorist epi-centre that is spreading from Central Asia in two directions: northwards, tothe Black Sea, and eastwards, to the Mediterranean. The Mediterranean isjust one of the areas through which the row of dominos passes on its wayfrom Afghanistan to the Middle East, the Maghreb and the whole of

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Europe. The recipe for stability no longer lies solely in military interventionand frenzied activity of the international intelligence agencies, but also inunderstanding and development, for which the legitimate means of inter-national society must be used.

Europe's geographical proximity is boosting its awareness of this situa-tion. Accordingly, during the year the governments of countries such asFrance and Germany attempted to open the eyes of the US administration.Their aim was to bring home to the US the fact that the situation in Iraq is justas urgent as the Palestinian issue, and that the solution does not lie in dis-mantling the political authority but in remedying the circumstances in whichthe people live. It is obvious that the United States needs to adopt such aview of the world order if it is to recover its increasingly flagging leadership.

Such is the pressure Europe is bringing to bear. Mediterranean affairsare helping to ensure that Washington complies with international legiti-macy. This is the only way of restoring its credibility as a world leader ofwhich a moral justification is required in its international relations and alsothe only way of preventing it acting solely on the basis of its economic andtechnological supremacy.

By this we do not mean systematically opposing the United States andcertainly not preventing it from combating international terrorism whereverthis lies; rather, co-operation should be conditional upon a question oflegality, of means and formulas for seeking solutions and, above all,thoughts on the world order we hope to have in the future.

Perhaps the role of the European governments goes no further thanthis. Europe will not lead international decision making. The EuropeanUnion's Foreign Security and Defence Policy will most probably find itselfdivided and dragged along by US policy, but at least, during this past year,it has helped keep check on a unipolar hegemony waiting to make of a fulldisplay of its power on the world stage.

We will now go on to discuss the specific events in the Mediterraneanfrom which this conclusion is drawn.

THE MIDDLE EAST: FROM A MEDITERRANEAN ORDERTO A WORLD ORDER

Neither of the two main Mediterranean conflicts is new; however theymoved onto a new plane as a result of 11 September. Major changes were

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witnessed in essential aspects, such as the worsening of violence in thecase of Palestine and the Iraqi government's response to the internationalsanctions, but what is most noteworthy is their new position in the inter-national security landscape.

In this connection, one has the impression that behind the "BushDoctrine", that is, America's international policy based on combatingterrorism, lie old geopolitical theories like those of Mackinder. It wouldseem that the new world order has caused a 21st-century version of the"heartland" to rise from the ashes of the Cold War. The concept of thepower wielded by the world powers and the nature of the resources thatprovide this power has changed. This has led to a certain geographicalshift, though the essence of the doctrine remains the same. Central Asiaand the Middle East have accordingly become the pivot area whose con-trol is the key to world domination.

Petroleum from Chechnya and its surrounding areas, and from Iraq, Iranand Saudi Arabia has become the keystone of the new order. In theCaucasus, the Russian Federation continues to protect these resources,which it regards as a domestic matter, and in the rest of the region theUnited States considers them to be under threat following the resurgenceof the radical Islamism that triggered the attacks on the World Trade Centre.

This explains why America's obsession of "settling" the Iraqi issue ga-thered considerable momentum during the year. The priority attached tothis question has grown in proportion to the difficulty of achieving such anaim. The Palestinian issue, which gave rise to a number of actions in thefirst half of the year, gradually became subordinate to Iraq. The schemeseems simple, but it is also naive.

As occurred with the Gulf War in the early nineties, it is presumed thata permanent solution to the embargo on Iraq will clear the way for a solu-tion to the Palestinian conflict. However, the White House does not appearto realise that the circumstances are not the same.

The end of the second Gulf War gave impetus to the peace process inthe Middle East, because the wave of Islamism had been subsiding sincethe death of Ayatollah Khomeini in 1989. The Muslim Arab world waswilling to find a global solution to the circumstances that the surge ofIslamism in the eighties failed to solve. But this is no longer the case

The nineties witnessed a period of international euphoria in theMediterranean, when all hopes were pinned on the peace process; howe-

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ver, this excitement also died down. The decade ended in fresh frustrationfor the Palestinian cause and for the Arab people as a whole. Within theMuslim Arab world this situation has been attributed to the United States'inability to play a truly conciliatory role between the Palestinian and Israelisectors, particularly since the outbreak of the second intifada, the impos-sibility of signing the Camp David accords and Israel's impunity since 11September. Now Islamism is not waning; rather, it is gaining strength. Andthis time around it is not an Islamism imposed from above; now the Islamicmovements are drawing their strength from the lower layers of society,among which it is spreading much more quickly and taking root firmly.Therefore, a solution to the Iraqi situation will not be so relevant to settlingthe Palestinian question.

Furthermore, the obvious inclusion of the Middle East in the pivot areaon which control of the world order depends is distancing it from theMediterranean processes. The appropriateness—or rather the possibi-lity—of separating the Barcelona Process from the Middle East PeaceProcess has been questioned for a long time. Evidently, the failure ofinternational mediation in Israel and the inclusion of this area in the frame-work of other world objectives enforces the opinion that relations with theMaghreb should be separated completely from those of the Masreq.What is not so clear is whether this divide is real, bearing in mind thesocial movements we have been witnessing among the Arabs over theyear, for it is a fact that anti-Americanism and, by extension, anti-Westernism, is growing at the same pace in Central Asia as in NorthAfrica. This can be best seen in the momentum gained by the fundamen-talist sectors, which advocate Islam as an identity of their own vis-à-visthe West.

Unfortunately—and some will prefer to turn a blind eye to this—theworld order we are moving towards is consolidating Bin Laden's message.By upholding his view of the "axis of evil", in which Iraq and Iran—the pillarof the Muslim world—are included, President Bush is playing into thehands of precisely what needs to be combated. We are not facing the"clash of civilisations" that appears to the inferred from the US axiom; weare experiencing the effects of an act of terrorism perpetrated by someMuslim fanatics.

Therefore, Europe's responsibility and influence in the Mediterranean isone of the most important challenges that the Foreign Security andDefence Policy must address.

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The "Iraqi issue"

We have explained the context that has led to the resurgence of the "Iraqiissue" in the international arena. We could add further explanations relatingto America's domestic policy. Some regard this objective as a means ofstrengthening George Bush's leadership at home. That is, as an attempt tomake up for the failure to capture Bin Laden following the operation inAfghanistan by offering public opinion an element of cohesion to enable thepresident to maintain his power and, furthermore, the message of "united westand" that has gained popularity in the United States in recent months.

Although it is important to bear in mind these aspects of America'sdomestic policy, we should not fall into the temptation of regardingSaddam Hussein as a victim. The Iraqi regime is not a victim, it is thescourge of the Iraqi people. In this respect, the international society musttake action, but in the interest of the Iraqi people, not that of the worldpowers.

Therefore, we stress, the problem the United States faces is not thegoal, but the means of achieving it. Unilateral action, overriding the deci-sions of the Security Council, is what causes confusion, leads internatio-nal tension to mount and prevents a solution to the issue.

The idea of a attack on Iraq is not directly linked to the attacks ofSeptember 2001, since the US administration had already planned anoperation before they occurred. But things started happening very quicklyafter news of a possible attack on the Baghdad regime in May 2002 beganto spread towards the end of the year.

The United States and Britain bombed the security zone established bythe United Nations on several occasions during Iraq's years of isolation,but the planned intervention envisaged in this case would be a differentmatter. The aim would be to overthrow Saddam Hussein.

In March, taking advantage of the leeway provided by the attacks,which brought even America's most traditional opponents over to its side,the United States sent Vice-President Cheney on a tour of the Middle East.The American leader hoped to be able to gain the support of the Arabcountries for an attack against Baghdad, but his proposals were rejected,even by one of his loyal allies, Saudi Arabia.

The White House began to feel disconcerted, as it not only came upagainst the Arab countries' reluctance to support a military operation but

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also witnessed cracks appearing in the European Union, when Germanyexpressed its categorical opposition to participating and France made itspresence conditional upon the decisions of the Security Council. Spainand Italy shared this stance. As expected, Britain was the only uncondi-tional support the United States found among the major European powers.

Indeed, the developments within the Arab world contrasted greatly withAmerica's designs. At the end of March the Arab League Summit was heldin Beirut. During the course of these sessions the Arab governments, oftheir own accord, put the Gulf War behind them and the rapprochementwhich took place between Saudi Arabia, Kuwait and Iraq was backed by allthe members of the organisation. The summit served to express the harmthat the war caused the Arabs a decade ago and their wish to bridge thisgap by putting into practice the unity and sentiment of the Arab "umma" towhich Western analyses and calculations give little consideration.

However, backing for the Iraqi regime subsequently reached a limit inApril, when Saddam Hussein proposed using oil as a war weapon by cut-ting off supplies to the Western countries for a number of weeks. He failedto elicit a positive reaction from the rest of the Arab states. Nor did Iranagree unless this were a joint action of the region's oil-producing states.

At the time, the "Palestinian issue", which was experiencing one of theworst moments in the Middle East Peace Process's ten-year history, wasundoubtedly the weightiest argument for preventing relations between theArab world and the West from growing even tenser. We should not forgetthat the same Beirut summit had unanimously approved the Saudi Arabianplan to support the Palestinian cause.

The problem flared again in July with the fresh announcement of anAmerican attack. The decision seem so firm and so imminent that the Iraqiopposition groups in London even met to prepare a new government totake over once Saddam Hussein had been overthrown.

America's threat of acting unilaterally with the support of Great Britainunleashed a flurry of diplomatic activity from the European foreign minis-tries. President Bush used all possible arguments in his attempt to securethe support of the European Union. During the autumn months we weretold of the "need to overthrow Saddam Hussein", the "need to send UnitedNations inspectors", the "need to stem the manufacture of weapons ofmass destruction " and the "need for the Baghdad regime to disarm". Amishmash of ideas, but all pointing in the same direction: an attack on Iraq.

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Eventually the United States managed to convince the European andArab states of the threat that Iraq can pose to international security, but itwas forced to accept all the reservations and steps required by the inter-national community in exchange for its support. Even Turkey, which, at thebeginning of the year supported a unilateral US attack, eventually cameround to the United Nations' position.

Therefore, the first thing the US administration had to admit was thatIraq's supposed danger lies in its ability to manufacture weapons of massdestruction and in its intention to use them. Such an issue did not warranta direct attack but rather a United Nations Security Council Resolution (no.1441) requiring Iraq to allow the inspectors to return unconditionally andperform their task without hindrance. In November, following heightenedinternational tension and contrary to America's expectations, SaddamHussein accepted the resolution.

Although this resolution has not settled the internal problems of theIraqi regime, it is, at least for the time being, preventing an internationalconflict that would probably have strengthened Saddam Hussein's posi-tion in power or created political turmoil in the republic, with obvious inter-national implications. We should bear in mind that the consequences ofthe possible downfall of the Iraqi president are neither clear nor simple.The resulting situation would be highly uncertain and not without majorrisks for the international community.

The "Palestinian issue"

The situation in the Palestinian territories throughout the year clearlyshowed that US mediation is flagging and that the Middle East PeaceProcess is failing. None of the international players has disappeared fromthe scene. However, the fruits of their efforts are not only failing to ripen;rather, they appear to be withering.

The process, beset with difficulties since it was launched, began tomove rapidly backwards two years ago. The outbreak of the second inti-fada in September 2000, triggered by the presence of Ariel Sharon onTemple Mount Esplanade, demonstrated the strength of the Palestinianpeople and shed light on the political crisis the Palestinian NationalAuthority is experiencing. Both circumstances came to a head during theyear.

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Furthermore, also two years ago, this time in December, PresidentArafat rejected the Clinton plan once and for all, thereby relinquishing hislast opportunity to accept what had been previously agreed on at CampDavid during the summer. The Palestinian leader's refusal signified the fai-lure of American conciliation. From that moment on, the United Statesentered a race of attrition which took its toll during 2001, coinciding withthe change of government both in Washington and in Tel Aviv, and reachedcompletely inadmissible extremes in 2002. It has reached a point thatmany do not wish to acknowledge: an open conflict between Palestiniansand Israelis. Not to mention the internal rifts this has driven in the politicaladministrations on both sides.

It is becoming increasingly obvious that the United States regarded theCamp David agreements as the last attempt to reestablish peace. That isthe message that the Palestinians have had to come to terms with sincethen. In this respect, 11 September served as a backdrop to a decisionthat had already been taken. Mr Sharon's government has not hesitated totake advantage of the resulting circumstances, making the Palestiniansthe target of what he interprets—from his radical viewpoint—as the fightagainst terrorism.

Israel's course of action is favoured by the new international approach.As mentioned earlier, the United States has changed its tack and is nowlinking peace in the Palestinian territories to a solution to the problem inIraq. It hopes to strengthen its negotiating position as a mediator when ithas resolved the second of these issues. This is leading Israel to act withtotal impunity in the Palestinian territories

Furthermore, Palestinian terrorism has grown in response to the frus-tration and impotence. The fundamentalist groups that existed back in theeighties—such as Hamas—have been joined by new players in the pasttwo years, the Al Aqsa Martyrs Brigades. These radical groups are winningthe support of increasingly broad sectors of the population that thePalestinian National Authority is incapable of controlling. And the growingacts of terrorism, mainly human bombs, largely escape Mr Arafat's deci-sions.

Fundamentalist terrorism is not a new factor in the Middle East; howe-ver, we are witnessing the "divinisation" of these attacks, which justifiesand exalts them in the eyes of some sectors of the Palestinian population.Israel's reaction has become increasingly violent and ineffective. TheIsraeli army has reoccupied the Palestinian territories, showing signs of

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how mistaken and horrific the use of military force to combat terrorism—particularly when many situations are wrongfully classified as such—canbe in certain situations. During the year a wall separating Arab territoriesfrom Israeli land was even built.

These circumstances have created a vicious circle that has both YasserArafat's and Ariel Sharon's governments in the grip of crisis. Neither of theleaders has managed to fulfil the promises their people hope for, neitherthat of establishing an independent Palestinian state nor that of restoringIsraelis' security, respectively.

As for specific events, the year began with an open confrontation inwhich the police of the Palestinian National Authority showed their oppo-sition to the presence of the Israeli army in the territories. Since then wehave likewise witnessed a change of strategy in the intifada, which hasshifted towards greater sophistication by using some home-made "mis-siles" and attacking Israeli police posts.

This change in street fighting led the prime minister, Ariel Sharon, tocrack down harshly on the Palestinians, reoccupying the territories usingtanks and Apache helicopters. In spring we witnessed the so-called "ope-ration defensive wall", which was clearly aimed at hounding and harassingYasser Arafat at his compound in Ramallah. These events were followed afew weeks later by the incident involving a group of Palestinians, des-cribed by the Israeli government as terrorists, who occupied the church ofthe Nativity in Bethlehem and were besieged for almost a month. Duringthe weeks that elapsed between February and May, the Arab populationof the different towns and cities was subjected to several curfews, leadingto shortages towards the end of the year in Palestine. These developmentshave rekindled the population's bitter feelings and sparked a chain ofattacks in Israel that are impossible to prevent using force. The number ofPalestinian "human bombs" has multiplied, claiming many Israeli lives.

International diplomacy reacted to these developments by exertingpressure, which, despite achieving some results in the first month, subse-quently proved utterly ineffective. In the first half of the year, when Spainassumed the presidency of the European Union, Mr Aznar had to step inand follow the negotiations closely.

As a result, it so happened that many of the key names on the interna-tional agenda for the Middle East were Spanish. From President Aznar andhis minister of foreign affairs, Mr Piqué, to the European Union represen-

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tative for the peace process, Mr Moratinos, and the Union's CFSP repre-sentative, Mr Solana.

The importance of the "Palestinian issue" led Mr Piqué to make a tourof the Middle East in the company of Miguel Angel Moratinos, as soon asSpain took over the presidency.

From the meeting of European Union ministers held at Cáceres in earlyFebruary, the possibility emerged of acknowledging a Palestinian state.However, in less than a week the related declaration was postponed inde-finitely in view of the spiralling violence in the territories.

Simon Peres, Israel's foreign minister, visited Madrid amid this openconflict and asked Mr Aznar for greater involvement from the EuropeanUnion. This meeting already evidenced the worsening internal crisis inIsraeli politics, in a national coalition government struggling to keep itshead above water.

An important and novel step which, at the time, aroused certain hopesas to the effectiveness of international pressure, was the Security Councilresolution (No. 1402) in March condemning Israel. This resolution called forthe withdrawal of the army from Palestinian territories. For the first time theUnited States voted in favour, showing the new approach to the worldorder that 11 September seems to have brought about. However, thedeclarations did not lead to any action.

At the end of that month, the Arab League summit in Beirut unani-mously approved the Saudi Arabian plan to support the Palestinians afterconsiderable effort was made to force a consensus between the attendantArab states (10 out of the 22 which were invited). President Arafat wasunable to attend the event as he was confined to Palestinian territory andother notable absences were Egypt's President Mubarak and KingAbdullah II of Jordan. Mr Aznar, as president of the European Union, tookpart in the Arab summit, ratifying the resulting position.

The plan failed to add any significant new aspects to the requirementsof returning to the 1967 borders, recognition of an independent state, with-drawal of the army and resumption of negotiations. It is nonethelessimportant, not so much for its content as for Saudi Arabia's involvement inthe peace process. This leap forward will undoubtedly influence Riyadh'sfuture relations with Washington, but has also affected the new context inwhich the US administration is currently finding itself in this region.

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Despite all the efforts of international diplomacy, the aforemen-tioned violence continued. In this situation President Sharon refused tohold a meeting with Mr Aznar and Mr Arafat. President Bush eventhreatened to take action against his Israeli counterpart's state unlessit complied with the United Nations resolution, but this warning fell ondeaf ears.

Given the seriousness of the situation, the so-called "Moncloa Quartet"was formed, bringing together the efforts of all the international players,the United States, the Russian Federation, the United Nations and theEuropean Union. Once again, the effectiveness of this pooling of wills layin its significance with respect to the world order rather than in its objec-tive results regarding the Palestinian situation.

This united front, for the first time, led to a global and multilateralapproach to the "Palestinian issue", which was achieved thanks to theEuropean Union's insistence. In a sense, this diplomatic merger helpedsave the credibility of international society, which is increasingly subjectedto the will of the "major powers". At least formally, we may say that theUnited Nations was given a chance to regain some of the significance ofits world role.

As regards the European Union, if this initiative has served some pur-pose it has prevented the Palestinian side from being trampled on. It isobvious that, however much Mr Arafat has been questioned, if thePalestinian National Authority managed to weather the crisis of the firstmonths of the year, it was owing to the European Union's intervention.Given the Union's diplomatic weight, it could not have expected toaccomplish any more than this, but nobody can deny that this is a consi-derable achievement. In Europe, these circumstances put further pressureon the Spanish presidency, which had to devote much of its activity toMiddle Eastern affairs.

This was practically the last effort of international diplomacy. Althoughthe American Secretary of State, Colin Powell, managed to resume talksbetween President Arafat and Mr Sharon, these were immediately marredby a host of circumstances, such as the arrest and trial of MarwanBarghouti, Mr Arafat's right-hand man, and the investigations of the"crimes of Jenin", etc. All this led to the deterioration of the negotiationsbetween Palestinians and Israelis and the internal situation of both govern-ments.

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As for the Israeli government, cracks began to show in the Likud partyin May. Benjamin Netanyahu defied Ariel Sharon by opposing his policy.As a result, the Likud ended up stating that it did not recognise the rightof a Palestinian state to exist. This position was once more condemned byall the European foreign ministries. The situation subsequently worseneduntil the end of October, when the Labour Party reiterated its support forthe national union government, forcing Ariel Sharon to form a new cabinetin which he had to make concessions to the more radical sectors by incor-porating members of these groups—such as general Saul Mofaz, who wasresponsible for repressing the intifada. This would suggest that the currenthardline policy is not going to ease. Mr Netanyahu forced the situation tobring about early elections in Israel.

In May Yasser Arafat, addressing the Palestinian parliament, had toadmit to his own strategic errors, leaving the door open for a major reform.However, the Palestinian National Authority was unable to withstand thepressure from the United States and one month later President Bushannounced he was willing to support the creation of a Palestinian stateprovided that Mr Arafat was removed from the political scene. New presi-dential and legislative elections were immediately announced for January2003. The credibility of the rais has clearly slid to one of its worst lows andhe no longer has the backing of many members of the Palestinian parlia-ment.

Despite this announcement, nothing seems really clear in this conflict.Whether or not Mr Arafat stands for election will be a key factor whenmaking forecasts about the future of the region. In any case, elections canonly take place if the Israeli army withdraws from the Palestinian territories,but there are no signs of this happening. On the other hand, the prospectof Israeli elections should also be borne in mind when trying to figure outwhat the coming months hold in store for Palestine.

The situation became deadlocked in 2002. Political changes on bothsides may help explode the myths surrounding the conflict, as both MrArafat and Mr Sharon have a long history in preventing progress beingmade towards new positions. With these two leaders still on the scene, theMiddle East will inevitably continue with its sights set on the past. Newpeople need to take over in order to resolve the future. On the other hand,the international community, acting jointly, ought to have much greaterweight than it currently enjoys. What we do not know is whether this willbe possible while there are other international priorities in the same region.

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Relations with Iran

Although the Republic of Iran is geographically distant from theMediterranean, it exercises significant influence over its Arab neighboursas an Islamic state. This year, which witnessed a restructuring of the inter-national order, we must compulsorily include it in this section.

Iran's condemnation of the attacks on New York was essential in pre-venting an international Islamic insurgence. Mr Khatami's government didnot allow itself to be deceived by al-Qaeda's goal of stirring an Islamicuprising against the West. Had it done so, it could have fuelled a conflictthat would have risked extending quickly across the other Muslim andArab countries of Asia. However, the Islamic Republic acted with themoderation that befits a world power.

It is surprising that Iran's position was not fully appreciated. In hisaddress on the state of the nation, President Bush had no qualms aboutincluding the Islamic Republic of Iran in the so-called "axis of evil". Thisirritated Mr Khatami's government and marred relations with the UnitedStates.

Given this situation, it is hardly surprising that the European Union hasattempted to protect its own interests by clearly attempting to distanceitself from America's policy towards Iran.

It is in this context that we should consider the visit of PresidentKhatami to Spain at the end of October.

THE EURO-MEDITERRANEAN PROCESS

The fifth Euro-Mediterranean Ministerial Conference of the BarcelonaProcess took place in April in Valencia. The situation of the Middle Eastconflict, which we have analysed above, was a decisive factor in the nego-tiations held.

The first stumbling block was the boycott staged by Syria and Lebanonin reaction to Israel's participation. It had actually been the fifteenEuropean countries that insisted on the need for Israel's presence, hopingto overcome the current situation and steer the conclusions of the confe-rence towards the future. By denying to take part in any case, the Beirutgovernment postponed the signing of own association agreement with theEuropean Union.

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As a result, the conference was scarcely more than a forum for dialo-gue that allowed a few solutions to the eastern Mediterranean conflict tobe proposed and facilitated contacts, even though this is not its purpose.

The fact that the conference was actually held was something of anachievement, although in the end the twenty-five states that attended alsoapproved an action plan. This plan consisted of a number of political,social and economic goals that should progressively bring both sides ofthe Mediterranean closer together. The most notable aspects, owing per-haps to their novelty, were the creation of a Euro-Mediterranean parlia-mentary assembly, the inclusion of terrorism as a fundamental concern—the effect of 11 September—and co-operation in matters of justice andinternal affairs.

However, let us not forget that we are dealing with intentions. The pre-sidency conclusions expressed the increasingly pressing need to ratifyand develop the commitments made at the Europe Mediterranean Forum,precisely because of the current conflict.

The situation in the Middle East undermines the credibility of thisdeclaration of intent. Doubts arise as to whether the true objectives thatinspired this process in 1995 can be achieved. We are certainly a very longway away from creating an "area of peace and stability", particularly if wedo not reassess the European Union's role as a political player and merelylimit it to that of financial agent. As for the attempts at reaching a "mutualunderstanding", it is essential to take steps to dispel the anti-Muslim pre-judice that has arisen from the new international situation as soon as pos-sible.

In addition to the Middle Eastern conflict, whose influence extends tothe whole of the Mediterranean as far as the Atlantic Ocean, the othermajor obstacle to development in the region is the massive and rapidmigratory movements that have been witnessed in recent years and con-tinued to grow in 2002. Clandestine immigration from the Maghreb, boundlargely for Spain as the gateway to Europe, is due to the current economicgap between the two shores. It is also an activity on which organised cri-minal groups—one of the most important destabilising factors in thesource and host countries—thrive, but above all it is one of the most fertilebreeding grounds for the violation of human rights. The situation led to thepromise to call a new ministerial conference on Migration and SocialIntegration of Emigrants for the second half of 2003.

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Managing these declarations properly and appropriately is one of themost urgent issues the European Union needs to address. Even if at thisstage we are only dealing with intentions, it is obvious that Europe is beco-ming fully aware of the importance of the Mediterranean for internationalpeace and security. There is still much room for improvement as regardsacting on these ideas, but such criticisms must not prevent work conti-nuing in this increasingly necessary process.

THE MAGHREB TRIANGLE (MOROCCO, ALGERIA AND WESTERNSAHARA) AND SPAIN

We could review the situation in the Maghreb during the year by analy-sing the changes that have occurred in the area independently. However,the fact that these changes have largely conditioned Spain's relations withthe different regional players makes it advisable to analyse them from ajoint perspective and in connection with the action of Madrid government.

Western Sahara

The current diplomatic crisis between Spain and Morocco is obviouslyrelated to the Spanish government's position with respect to Western Sahara.

The United Nations has attempted to rescue the Saharan dispute fromthe deadlock it has been in for some time now; however, no solution hasbeen found despite the international efforts.

After several attempts by the Security Council to put an end toMINURSO's mandate, the withdrawal date was progressively postponedand eventually set for January 2003.

For yet another year, the continuous postponements led the UnitedNations' special envoy James Baker to present the Security Council witha programme with four alternatives for the future of Western Sahara.

In February, Kofi Annan disclosed the Baker Report, urging the maininternational players to adopt stances. The proposals were based on thefollowing alternatives: 1) continue with the Settlement Plan, which envisa-ges a referendum on self-determination; 2) develop and adapt theFramework Agreement, which provides for a self-governing regime andMorocco sovereignty; 3) divide the territory between Moroccans andSaharans; and 4) withdrawal of MINURSO.

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The most novel aspect of the plan was, in fact, the pressure it broughtto bear on both sides to shake the dispute out of its current rut. For thefirst time it was established that, in the event of lack of agreement, theSecurity Council could impose the second or third alternative. This wasalso the first time that the third option was considered among the possi-ble solutions.

The members of the Security Council began to define their positionswith respect to these proposals. They regarded the idea of dividing theterritory as risky as it could destabilise the region as a whole, although theSaharans were willing to negotiate on this basis. The options that were dis-carded were the Settlement Plan and the framework agreement, as eachof the parties was unwilling to accept the alternative that was less favou-rable to its interests. King Muhammad VI showed he was not willing torelinquish an inch of the territory of Western Sahara, while Polisarioannounced it would declare war if Morocco annexed it.

The United States and France were in favour of making WesternSahara a self-governing region of the kingdom of Morocco; behind thisposition lay the question of the future exploitation of the region's oil.Britain, which chaired the Security Council, called for a solution that res-pected the Saharan people's right to self-determination, although when itcomes to the crunch, it is likely to cede to America's position. The RussianFederation also proposed maintaining the Settlement Plan. The nonper-manent members of the Security Council were very divided in their opi-nions.

These circumstances led the withdrawal of MINURSO to be post-poned, first until the end of April, then to July, and finally until January2003, as stated above.

Such was the backdrop to the Spanish presidency of the EuropeanUnion. From the outset, Mr Aznar's government was determined to urgethe Fifteen to agree on a common strategy to settle the dispute. However,as explained previously, European positions clashed. Spain upheld its tra-ditional stance, insisting on the holding of a referendum on WesternSahara and opposing any other type of solution to the conflict.

In the end, the Spanish representative to the United Nations, InocencioArias, announced that the Madrid government would accept the solutiondelivered by the international organisation. The minister of foreign affairs,Mr Piqué, went even further in his statements. He said that although Spain

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would abide by the decisions of the Security Council, the Spanish govern-ment could not overstep two limits: first, responsibility to history and,second, Spanish public opinion.

The fact is that Spain now stands alone with respect to its position onthe Western Sahara, while the United States, France and Britain haveformed a common front in favour of Morocco. On the other hand, thelonger the solution to the former Spanish colony is postponed, the morelikely Morocco's guarantees of carrying out its intentions to annex it are tofade and United Nations to go back to the idea of a referendum

At any rate, it is obvious that King Muhammad VI intends to maintain afirm stance with regard to the territory. Not only has he visited it on morethan one occasion during the year; also, in November, without regard forthe United Nations resolutions, he gave instructions to his government todraw up a set of measures to develop Western Sahara as Moroccan terri-tory.

Morocco

While attempts were made to settle the Saharan issue, the diplomaticcrisis between Spain and Morocco dragged on throughout the year.Morocco recalled its ambassador in October 2001. Subsequently, whenthe "Perejil crisis" flared in July 2002, the Madrid government recalled itsambassador. The countries have yet to exchange heads of mission.

The Rabat government's minister of foreign affairs, MohammedBenaissa, explained to the Moroccan parliament that the reasons for re-calling the ambassador were Spain's attitude to two key issues: immigra-tion and Western Sahara.

As for the first of these questions, in the past two years Spain has hadto step up measures to keep check on illegal immigration from Morocco,on the one hand, and, on the other, reform its Law on Aliens to tighten rela-ted legislation.

The Madrid government has not succumbed to international pressureto change its position on Western Sahara. And certainly not as a result ofthe high sounding declarations of Mr Benaissa, who did not hesitate toaccuse Spain of blackmail when Spain's foreign minister, Mr Piqué,expressed his willingness to study the question of the Sahara providedthat diplomatic relations were resumed.

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The crisis was not solved; on the contrary, it progressively worsenedduring Spain's presidency of the European Union. In June a group ofSpanish authorities and journalists were refused entry to the country. Inearly July, the Arabic-language Moroccan press—the Al 'Alam daily—accused Mr Aznar's government of trying to avenge itself for the occupa-tion of the Sahara in 1975 and blamed it for the failure of Morocco and theEuropean Union to reach an agreement on fishing. These incidentsreached a head several days later when the so-called "Perejil crisis" erup-ted, shortly after Ana Palacio had taken up her post as minister of foreignaffairs. It was then that Spain recalled its ambassador in Rabat, Mr AriasSalgado.

Although both the presidency and the ministry attempted to keep theissue of Western Sahara apart from the crisis triggered by Morocco'soccupation of the Perejil islet, everything seemed to indicate that theywere not separate matters.

The "Perejil crisis" can be interpreted in different ways. The mostobvious explanation is perhaps the most widespread: that is, a provoca-tion or threat from Morocco to Spain in reaction to the many pending bila-teral issues, including, from Morocco's point of view, Ceuta and Melilla.However, this hypothesis is highly contradictory and leaves room for otherinterpretations that are perhaps more coherent though little considerationhas been given to them. Namely a show of strength for the benefit ofMoroccans.

Perhaps the message was not intended for the Madrid government butactually for Mohammed VI, and came from forces—in this case, the mili-tary—that are reluctant to forgo their political and social privileges in thereforms the monarch intends. Nor should we overlook the fact that theincident occurred during the run-up to elections in the Alawite kingdom.

Indeed, two aspects of the events of 11 July are significant. First, itseems that the occupation of the islet by the Royal Gendarmerie surprisedeven the Moroccan authorities. Attempts were subsequently made tochange this version to attribute the monarch responsibility for the events.Second, it is highly contradictory that the royal wedding should have beenpostponed in April as a result of the worsening of the situation inPalestinian territories and that subsequently, in July, the day before thecelebrations, the king should have triggered a crisis with Spain. Whateverthe case, perhaps Morocco did not expect such a firm and unanimous res-ponse from the Spanish political forces.

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Irrespective of the explanation for the "Perejil crisis", we should ana-lyse the results in detail. Few things have changed in the Mediterraneansince this incident, which almost became a footnote in current relations.For the time being, it has proved more important to bilateral relations be-tween the Madrid and Rabat governments than to the Mediterraneanstates as a whole, which have lately been on their guard with all the talk ofthe myth of a clash of cultures. However, in the long term, it should not beregarded merely as a Spanish-Moroccan affair but as a combination of cir-cumstances that involves the European Union as a whole.

Once again the crisis revealed the weakness of the European Union'sforeign policy, which had trouble coming up with a firm and unanimousposition. Although the official position supported Spain, certain countries'responses were rather lukewarm, such as that of France, which preferredto take a pragmatic stance in keeping with its own interests.

The situation in the Mediterranean proved to be much more importantto the United States. The dispute between Spain and Morocco placedWashington in an awkward position, torn between a NATO ally and one ofthe states in which it has strategic and energy interests. Indeed, it wascalled on to mediate when the tension mounted.

However, the internal consequences have been considerable for bothSpain and Morocco. In Spain, President Aznar strengthened his leadershipin the eyes of public opinion. The main political parties managed to ironout their domestic-policy differences and agree on a foreign-policystance—we should not forget the controversy sparked by Mr RodríguezZapatero's trip to Rabat in December 2001.

Furthermore, Spain's firm stand, responding to a threat against its terri-torial sovereignty with the armed forces, spelled out a message loud andclear to our southern neighbour regarding the cities of Ceuta and Melilla.Finally, the crisis helped raise Spaniards' excessively dormant awarenessof defence, and proved the need to have the armed forces ready for con-ventional interventions other than peacekeeping operations. In this regard,it was a reminder of the material and human resources Spain requires forits security and defence.

It seems that with this incident Morocco attempted to further its owninterests and force a move from Spain with respect to the Western Saharaissue. It also hinted at its permanent claims to Ceuta and Melilla, theSpanish self-governing cities in north Africa. As usual, these territorial

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claims were repeated during the speeches to commemorate Throne Dayin July and the twenty-seventh anniversary of the Green March inNovember. However, Morocco largely lost the bilateral wrestling matchwith the Spanish government, which, as expected, once diplomatic chan-nels had been exhausted, not only reacted but had the backing of Europeand NATO.

At home, Mohammed VI was exalted by the Moroccan media and wonthe support of his people. This is an important fact, bearing in mind thatHassan II still enjoys a more prominent role that his successor.

All in all, the "Perejil crisis" gave rise to a host of speculations on theinternal tension the Rabat government is experiencing between theinfluential elite and the monarch.

Therefore, apart from the Perejil incident, we should not be surprisedthat the major changes taking place inside Morocco are influencing thecountry's external action. In this connection, the result of the latest gene-ral election in late October cannot go unnoticed.

The election turnout was no higher than 52 percent according to offi-cial figures. From this we may deduce that the Moroccan people expectthe election results to bring very little change. Despite the attempts attransparency and legality stressed by the Makhzen, the election was limi-ted on two accounts. First, the three millions of emigrants residing abroadwere not allowed to vote and, second, the number of constituencies whereIslamist candidates were allowed to stand was restricted. Nor does itmake sense that some of the territories belonging to former SpanishSahara should have been included on the political map drawn up for theelections and, as such, interpreted as divisions of Morocco.

In other respects, despite the possible irregularities, it is important tobear in mind that Morocco's political system is similar to the Westerndemocracies, and this should be appreciated while the bilateral diploma-tic crisis remains unresolved. In any event, a bigger turnout would nodoubt have been more desirable.

As expected, the Socialist Union of Popular Forces Party and theIstiqlal competed for the largest number of seats in parliament. The thirtyseats for women in the parliament is a new and noteworthy feature, butmore significant still was the rise in the Islamist sectors. The Justice andDevelopment party trebled its seats, a result very much in line with whathas occurred in other Muslim countries over the past year. The head of

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government is now Driss Jettou, whose profile is very different from that ofhis predecessors and on whom great hopes are pinned for the develop-ment of Moroccan politics.

These results are also consonant with the social developments wit-nessed in Morocco. The votes secured by the Islamist parties are largelydue to the malaise caused by the economic hardship our southern neigh-bour is experiencing. This situation is reflected abroad in the fast-growingstream of illegal immigrants turning up on Spain's coasts.

Algeria

We cannot omit to mention Algeria when dealing with this triangle ofrelations. Although the Spanish government has made a point of stressingthat relations with Algeria are independent of the current crisis withMorocco, the Rabat government does not share this view.

Algeria signed an association agreement with the European Union atthe Euro-Mediterranean conference in Valencia in April. At the same time,it strengthened its co-operation with NATO in the new regional securityand defence framework. This Maghrebi state also held parliamentary elec-tions in May in which, contrary to what occurred in Morocco, the Islamistsectors lost ground, although the turnout was also very low.

This led President Aznar to intensify bilateral relations with his coun-terpart, Abdulaziz Bouteflika. This effort culminated in the signing of a bila-teral treaty of friendship, co-operation and good neighbourly relations inOctober. The enhancement of Spain's ties with Algeria should lead togreater economic co-operation, thereby guaranteeing energy resourcesand closer collaboration in combating illegal immigration.

In this new climate of closer relations, and with a view to Spain's mem-bership of the United Nations Security Council from 2003, the Algeriangovernment urged President Aznar to continue to press for a referendumon Western Sahara. This circumstance completes the picture of relationsbetween the countries in this region.

Libya is not part of the Maghreb triangle we are analysing. All we willsay about this country is that, as the year progressed, Colonel Gadafficonfirmed his devotion to the African Union initiative. In October, on theanniversary of the Republic, the Libyan President condemned the attacksof 11 September.

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TURKEY: THE CYPRUS DISPUTE AND THE EUROPEAN UNION

Another of the disputes in the eastern Mediterranean is the internalsituation of the Republic of Cyprus and its relations with the EuropeanUnion. Both matters directly affect the Republic of Turkey.

As we have remarked in previous editions of the Strategic Panorama,this dispute has been dragging on since the sixties and progressively wor-sening since the end of the nineties, when Cyprus became a candidate formembership of the European Union.

Hopes of a Turkish Republic of Northern Cyprus (TRNC) were dashedin 2002. Although the United Nations had advised Cyprus to become uni-fied before joining the European Union, this does not seem likely to hap-pen. During his trip to Nicosia in February, Mr Aznar stated that althoughit would be preferable for the island to solve its domestic problems, thiswould not be an essential requisite for joining the Union.

This prediction made by the Spanish premier as president of theEuropean Union was confirmed in October. Whereas the Republic ofCyprus—that is, the Greek Cypriot president Glafkos Clerides—received adefinite pat on the back from Europe, with the support of Greece, the aspi-rations of the Turkish Cypriots have yet to be recognised.

Therefore, when the Republic of Cyprus joins the European Union in2004, this will only affect the inhabitants of the south of the island(600,000). Those living in the north (200,000) will not be able to benefitfrom this membership.

Meanwhile, the Turkish Cypriot president, Rauf Denktash, will continueto seek a means of settling this dispute. He will carry on defending thesovereignty of the TRNC under a future confederate state in which foreign-policy and defence matters are shared. This possibility began to fadeduring the year vis-à-vis the future creation of a federal state as laid downin the 1963 agreements.

The only step made during the year was the possibility of allowing theTRNC to join as a European Union candidate before the Republic of Turkeyand irrespective of Turkey's future. However, this solution Mr Denktash isoffering does not seem at all feasible. First, because the self-proclaimedTurkish Cypriot republic is only recognised by Turkey; and second, be-cause Europe has closed its doors to the Ankara government.

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Indeed, no solutions were found to the Cyprus dispute during the year.Worse still, its only international champion has also had its European aspi-rations dashed, complicating the strategic landscape considerably.

The internal reforms carried out during the previous year by the Turkishgovernment to earn Europe's confidence were to no avail. In October itwas left off the list of ten countries recommended for the 2004 wave ofenlargement.

The exclusion of Ankara seems to be related to the economic and poli-tical criteria that the European Commission has established as minimumrequirements for membership. However, the situation has awakened someof Europe's dormant spectres.

The EU's decision not to allow Turkey to join has raised doubts as towhether, deep down, Europe objects to the idea of having a Muslim statein its midst, particularly given the population increase Turkey's accessionwould entail.

Turkey has not been rejected outright, but its candidature for the mem-bership of the "Club" has been postponed.

The United States does not approve of Brussels' decision to keep theTurkish republic at arm's length. The US administration clearly expressed itsunease at Europe's rejection of its main bastion of defence in the easternMediterranean. This confirms the deep contradiction and ambiguity ofTurkey's situation—a member of NATO yet an outsider to the European Union.

The situation at home has not helped matters. In the November elec-tions, the prime minister, Bulent Ecevit, was completely ousted from thepolitical scene by the Islamist leader of the Justice and DevelopmentParty, Recep Tayyip Erdogan.

Turkey's Islamists hope to convey to Europe a very different image tothat of other parties of this nature. They aim to maintain the divide betweenpolitics and religion, presenting themselves as a sort of Muslim version of"Christian Democrats". However, neither Turkey's immediate past nor thepresent international climate of mistrust arising from 11 September seemlikely to give the Ankara government much of an opportunity.

2003 will be an important year, which should bring solutions to theissues that have arisen in this area over the past few months. Issues thatare deeply rooted but undoubtedly need to adapt to the changing cir-cumstances.

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CHAPTER FIVE

IBERO-AMERICA

IBERO-AMERICA

By Marcelino de Dueñas Fontán

GENERAL OBSERVATIONS

Ibero-America, with a total area of 20 million sq km and 507 million inha-bitants, is struggling to overcome the uncertainty surrounding its future asa strategic unit. The most important centrifugal forces that are holding backits integration and consolidation as a major power spring from the mistrustof its people, who are fragmented into 19 nations, and inability to identifythe most important issues. Nonetheless, there are very significant centripe-tal forces that should facilitate this desirable integration: first, the region'scommon culture and two established sister languages, Portuguese andSpanish; the religion, mainly Christian; and, finally, a phenomenon whoseexistence is only just beginning to be recognised and which, althoughfought against to the point of vandalism by those who still entertain outda-ted ideas, time will show to be a progress factor, globalisation.

The year 2002 has had its ups and downs. Negative aspects includethe pockets of economic instability that affect mainly Argentina and, to alesser extent, Brazil and Uruguay, and political instability, located chiefly inColombia, where an open war seems almost inevitable, but also in Cubaand Venezuela. The application of the concepts of democracy, liberty andhuman rights is also very limited and doubtful. Among the positive featuresare the glimpse of a brighter outlook following different elections, theemergence of a new generation that seems increasingly prepared to com-

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(*) Translator’s note: The IEEE opted for this term rather than the more commonly used «LatinAmerica» in order to reflect the iberian peninsula’s special links with those countries.

bat corruption, and the steps being taken, albeit hesitantly, towards supra-national economic and political associations.

The establishment of the Free Trade Area of the Americas (FTAA), sche-duled for 2005, after which the United States will enjoy greater influence inthe area, if such a thing is possible, is not far away now. But we should notdraw any negative conclusions from this, since any process that helps faci-litate Ibero-America's access to well-being, prosperity and social progress,as the FTAA will, must be accepted without reservations. Even so, the desi-rable creation of the Ibero-American Community of Nations will undoub-tedly be the most important milestone in these people's development.

THE SITUATION IN MEXICO

Mexico, with an area of nearly two million sq km and over 100 millioninhabitants—i.e. one tenth of the total area and a fifth of the population ofthe whole of Ibero-America—is a very important power, not only onaccount of its economic and human potential but also culturally. Its proxi-mity to the United States, its partner in the important trade associationtogether with Canada, the North American Free Trade Area (NAFTA), is amajor stimulus to foreign trade.

During the year Mexico strengthened its co-operation with Spain consi-derably in both the business world and in fighting terrorism. Relations withCuba deteriorated substantially following a timid rapprochement inFebruary, when President Fox visited Havana, until a fresh crisis erupted atthe end of March over Mexico's supposed connivance with the UnitedStates in keeping Cuba out of the UN conference in Monterrey and evenvoting against Cuba at Geneva owing to its lack of respect for human rights.

The Pope's fifth visit to Mexico in early August to canonise the IndianJuan Diago and beatify two Zapotec Indians of Oaxaca in Guadalupe basi-lica bore witness to the fervour of the people and served to exalt Mexico'sindigenous cultures.

April witnessed an unusual occurrence when the Senate vetoed Mr Fox'splanned trip to the United States and Canada, whereupon the president, in acaustic address, denounced the destructive attitude of the opposition par-ties, which were attempting to hamper the implementation of his programmeof reforms. He again complained bitterly about this at the EU-Latin Americaand Caribbean Summit held in Madrid. In July he had to resign himself toseeing his plans to build a new airport dashed by a peasants' rebellion.

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The opposition parties did not have much success. On the one hand,the elections of the Institutional Revolutionary Party (PRI) in late Februarywere highly irregular. Roberto Madrazo was proclaimed leader of the party,enabling former president Carlos Salinos de Gortari to come out of hisself-imposed exile and return to Mexico. On the other, in the April electionsthe Democratic Revolution Party (PRD) became bogged down with theinternal quarrels between the supporters of Rosario Robles andCuahtémoc Cárdenas instead of concentrating on building a state trulybased on the rule of law.

Other matters of interest were: the tightening of the judicial net around for-mer president Echeverría, who in July was charged with the Tlatelolco mas-sacre of 1968; the identification in August of the remains of the guerrilla fight-er Lucio Cabañas, killed by the army during the dirty war of the seventies;and, in November, the conviction for drug trafficking of two generals who fur-thermore will have to face a new trial for their involvement in the aforemen-tioned dirty war. This great country's democratic health is clearly improving.

The primary sector accounts for five percent of Mexico's GNP, industryfor 25 percent and the services sector for 69 percent. As for the socialsituation, the unemployment rate is very low, at just three percent; thegrowth rate of the population is a fairly high 1.47 percent; and life expec-tancy at birth stands at 72 years. Forty percent of the population live belowthe poverty line. The literacy rate is a reasonable 90 percent.

Despite its adverse indicators, Mexico's rich natural resources and welldeveloped industry point to a positive economic outlook. After eight yearsof membership of the North American Free Trade Area, its foreign trade isexpanding markedly. According to experts, it has overtaken Brazil as Ibero-America's most buoyant economy. Real GDP growth has been downwardadjusted and is expected to end the year at 1.1 percent (versus -0.3% in2001) and inflation at 5.1 percent (as opposed to 4.4% in 2001). Althoughmanageable, the country's external debt is sizeable ($172 billion), thoughfalling slightly. The deficit in the trade balance will amount to $9 million. Theoverall country risk, the indicator of the degree of confidence the interna-tional community has in the country's economy, is fairly low.

THE SITUATION IN CENTRAL AMERICA AND THE CARIBBEAN

Central America and the Caribbean comprises six nations, all ofwhich have coastlines bordered by both Oceans except for El Salvador,

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which is only bathed by the Pacific, and the Dominican Republic andCuba, which are Atlantic islands. In general they all have considerablyadverse climates and more than their fair share of seismic movementsand volcanoes.

The primary sector accounts for 15 percent of these countries' GrossNational Product, industry for 30 percent and the services sector for 55percent—obviously not a desirable breakdown given their relatively lowdevelopment and average unemployment rate of 13 percent. As for thesocial situation, apart from the major inequalities, 45 percent of the popu-lation live below the poverty line and the literacy rate is scarcely higherthan 80 percent. Average life expectancy at birth is 72 years and the popu-lation growth rate 1.7 percent.

It is difficult to predict the future of this group of nations, particularlyhow long it well take them to become integrated into the politico-econo-mic zones that are being shaped. However, this is bound to take placeeventually. Their excentric location with respect to NAFTA makes belon-ging to this area a particularly attractive option.

Nonetheless, this part of Ibero-America is politically highly volatile andthe real consolidation of democracy may prove a laborious task, althoughCosta Rica and, to a lesser extent, Panama, seem to have achieved this.Although larger than Spain, this region (672,000 sq km) accounts for littlemore than three percent of the total area of Ibero-America, while its 56.6million inhabitants represent 11.2 percent of the total population. In otherwords, its population density is considerably greater than in the rest ofIbero-America.

A significant event in Guatemala was the Pope's visit at the end of July,during which he canonised Pedro de Betancourt. Also in July, members ofthe Intervida foundation denounced the intolerable exploitation of agricul-tural labourers, who live practically as slaves in conditions that are parti-cularly hard on the women, who put up with all kinds of humiliation fromtheir employers in order to keep their jobs, which in many cases pay nomore than a dollar a day.

On 15 May, during the European Union-Latin America and Caribbeansummit, Quetzal country, an exceptional showing of immensely valuableitems from a period that spans 27 centuries of Mayan culture and three ofHispanic culture, was opened at the Centro Cultural de la Villa in Madrid.The exhibition ran until 21 July, before moving on to Vienna.

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In September, a mudslide, in which stones, rocks and tree trunks wereswept along, caused serious damage 155 km away from the capital ofGuatemala and killed at least 23 people, mainly children.

Guatemala's main sources of foreign currency are agriculture, tourismand emigrants' remittances. The development begun six years ago follo-wing the peace agreement with the "guerilla" continues, albeit moderately.Real GDP growth this year is expected to reach 2.5 percent, lower than in2001, and the forecast for inflation is six percent (versus 5.5% in 2001).The country's external debt will remain stable at some $5 billion, that is, ata low level. The deficit in the trade balance will amount to $1.5 billion, simi-lar to the figure for 2001. Nonetheless, the overall country risk continuesto be high.

The new president of Honduras, Ricardo Maduro, was sworn in on 28January, taking over from Carlos Flores. The ceremony was attended bythe Prince of Asturias, who visited the reconstruction work carried out afterhurricane Mitch in 1998. The country is still suffering badly from the effectsof both the hurricane and the drought experienced in recent years.

The forecast for real GDP growth is around one percent (compared to2% in 2001) and inflation is expected to be up slightly from the previousyear to 12.5 percent. Honduras's foreign debt will remain stable at some$5.8 billion and its trade balance will be favourable at around $100 million.The country risk is very high.

During his brief visit to El Salvador at the end of March, the USPresident, George Bush, offered to sign a free-trade agreement with all theCentral American countries, including Belize. The Central American repre-sentatives asked Mr Bush to extend the temporary residence permits ofhundreds of thousands of emigrants, particularly Salvadorians andNicaraguans, who are nearing the end of their authorised stay in America.

One has the impression that El Salvador is weighed down by the heavyburden of permanently reconstructing the country following the succes-sive disasters that occur there. Despite strong external demand, develop-ment is very slow. Real GDP is expected to grow by around two percentthis year, somewhat less than in 2001, and inflation to reach 3.8 percent,similar to the previous year's figure. External debt will remain stable atsome $4.7 billion, a moderate level, and the deficit in its trade balance willamount to $1.6 billion, somewhat lower than in 2001. The overall countryrisk is moderately high.

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In Nicaragua, on 10 January, that is days after the death of the poetPablo Antonio Cuadra, who is considered the poetic voice of CentralAmerica, the new president Enrique Bolaños was sworn in, taking overfrom Arnoldo Alemán. The Prince of Asturias attended the ceremony.

The former president, Mr Alemán was appointed president of Congressand dismissed from his post shortly afterwards in April after being formallyaccused of fraud and involvement in a corruption scheme.

Nicaragua's agricultural exports appear to have returned to normal inpart, though the country is still feeling the effects of the cuts in financial aidfrom the international community. Real GDP growth this year is expectedto amount to 2.5 percent (compared to 3% in 2001) and the forecast forinflation is 9 percent, somewhat higher than in 2001. External debt willremain stable at $6.1 billion and the balance of trade will be close to zero(it was -$1 billion in 2001). The country risk is very high.

The presidential elections in Costa Rica took place in two rounds, inFebruary and April. The Conservative candidate, Abel Pacheco of theSocial Christian Unity Party (PUSC), beat his opponent, the SocialDemocrat Ronaldo Araya of the National Liberation Party (PLN). On 8 Maythe new president took over from his predecessor Miguel Ángel Rodríguezat a ceremony attended by the Prince of Asturias.

Costa Rica has a thriving agricultural sector and microprocessorassembly plants which are contributing to its economic development,though the reforms under way, including large-scale privatisation, are pro-gressing too slowly. Real GDP growth is expected to amount to two per-cent and inflation to 9.8 percent, similar to last year's figures. Foreign debtstands at $4.5 billion and the trade balance surplus will amount to some$800 million, similar to the figure for 2001. The overall country risk ismoderately high.

In Panama, the presidency of Mireya Moscoso continued as normal. Itis now three years since Panama took control of the Canal.

The country has a flourishing services sector in which port activityplays an important role, though its economy depends heavily on the fluc-tuating prices of farm produce and oil. Real GDP growth will be two per-cent, lower than in 2001, and inflation will also amount to two percent,higher than last year's figure. External debt remains high, at $7.5 billion.The deficit in the balance of trade will be down from the previous year to$2 billion. The overall country risk is moderately high.

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In the Dominican Republic, the administration of the Social Democratpresident Hipólito Mejía, who took up his post in August 2000, continuedas normal.

The country is carrying out major structural reforms and has a highlydeveloped tourist industry which, in turn, makes for a buoyant construc-tion sector. Its economy is heavily influenced by fluctuations in the price ofoil, which it imports. Real GDP growth will amount to two percent, similarto the figure for 2001, and inflation to seven percent, somewhat higherthan in 2001. The country's external debt is considerable, some $5 billion,and its trade deficit stands at around $3.5 billion, similar to 2001. The over-all country risk is moderately high.

Cuba's relations with Spain were greatly influenced by the considera-ble number of ETA terrorists who have taken refuge on the island, where,with the knowledge and connivance of the Cuban government, they havecarried out activities that are detrimental to Spanish interests and suppor-ted Colombian terrorist groups FARC and ELN. The number of Cubanswho requested political asylum or entered Spain illegally during the yearwas very large.

Clashes with the United States were frequent during the course of theyear. American legislators, academics and high-ranking officials met inMiami in March to urge America to give a new direction to its foreign policytowards Cuba and put an end to the embargo. According to ambassadorSally Cowal, a Republican, on occasions the US has found itself backedonly by Israel and the Marshall Islands as regards its Cuban policy. Noteven the visit of former President Carter to Cuba in May served to defusethe situation, as the United States' strict application of the "democraticclause"—which, incidentally, was not applied to other dictatorships—ispreventing it from easing the harsh measures currently in force.

As for the possible democratisation of the system, this is not very likelyto take place during Castro's lifetime given the theatrical measures he tookin June to secure millions of signatures to support the reform of theConstitution that would ensure the survival of the Communist regime.

Cuba is nonetheless pressing ahead slowly with the opening-up of itseconomy and structural reforms. It has important agricultural and touristsectors and abundant oil and nickel resources, as well as a skilled workforce. Real GDP growth for the year will amount to 3.5 percent, similar tothe figure for 2001, and inflation to two percent (it was somewhat lower in

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2001). Cuba's external debt stands at $13.2 billion and its trade deficit atsome $3 billion, lower than the previous year. The overall country risk isvery high.

THE SITUATION IN THE ANDEAN COMMUNITY

The Andean Community comprises five nations located geographicallyin the northern part of South America. Bolivia is landlocked, while Peru andEcuador are bathed by the Pacific, Colombia by both Oceans andVenezuela by the Atlantic. Despite their sizeable natural resources, thesecountries' political instability—which is particularly marked in Colombiaowing to terrorism and in Venezuela on account of the governmentpolicy—is a stumbling block to any integration initiative.

As a bloc, these countries are very significant. Their total area, 4.7million sq km, is ten times the size of Spain and accounts for one-fourthof the total area of Ibero-America. The population of 116 million is equiva-lent to three times Spain's population and accounts for 23 percent of thetotal population of Ibero-America. Their best bet for the future wouldundoubtedly be an association with MERCOSUR.

The breakdown of this region's GNP is as follows: 13 percent origin-ates from the primary sector, 32 percent from industry and 55 percent fromthe services sector. The unemployment rate stands at 12 percent. Theaverage rate of population growth is 1.75 percent and life expectancy atbirth is 72 years. The literacy level is around 90 percent for the countriesas a whole, and is lowest (83%) in Bolivia. Sixty-five percent of the popu-lation live below the poverty line—an alarming figure.

In Venezuela, Mr Chávez continued to steer the country towards aCastro-style dictatorship under the guise of "Bolivarism", causing a majorinternal rift between his supporters, who are nostalgic for failed ideologiesas a solution to their ills, and the rest of the population—including not onlyhis opponents but also a large majority of the citizens who had once votedfor him, the trade unions and much of the military.

The general strikes in April gave way to a widespread popular uprisingthat led to the resignation and the subsequent imprisonment of Mr Chávezwithin two days and his bizarre return to power. The sight of the 11 Aprilmassacre led by Castro-style gunmen, who, with the inestimable supportof Spanish (ETA) and Colombian (FARC) terrorists, wreaked havoc among

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the demonstrators, causing some 50 deaths in what was later becameknown as the "Massacre of Silence", will no doubt be engraved on thememory of the people. The opposition leader, Pedro Carmona Estanga,took refuge in Colombia.

The major demonstrations staged during the following months werequelled by Mr Chávez using the National Guard. In August, Mr Chávez fellout with the Supreme Court, which refused to apply "Chávez-style" logicto the April mutineers. In October he had to resort to army tanks to quashthe demonstrations held in Caracas, in which over one million people tookpart. And in November, the opposition front and military caused torumours to intensify, ranging from an imminent coup d'état to civil war. InAugust Mr Chávez seized control of the Metropolitan police, which gaverise to the angriest of protests. There is only one possible solution: thepolls.

Despite its significant natural resources (particularly oil, but also gasand minerals) and the structural reforms carried out, Venezuela's econo-mic development is very greatly influenced by its heavy dependence onpetroleum and fluctuating crude oil prices, and its political instability. Thisyear the country's real GDP is expected to shrink by 5.3 percent (compa-red to last year's growth of 2.7%) and inflation to rise to 32.8 percent (from12.3% in 2001). Although high, its foreign debt of $33.5 billion dollars ismanageable and remains stable. The trade surplus will amount to $10.7billion, slightly higher than in 2001. The overall country risk is high.

In Colombia peace efforts continued in January and February, while theRevolutionary Armed Forces of Colombia (FARC) rationed their terroristactions in order improve their position in the talks. On 20 February,President Pastrana considered that all negotiation channels had beenexhausted and ordered the army to bomb the demilitarised zone, therebyputting an end to the cession of 43,000 sq km of land to the guerilla in1998.

The FARC continued with its terrorist actions practically without inter-ruption during the year, adding considerably to its list of murders and kid-nappings. Its most significant actions include blowing up 30 electricitypylons in January, causing a major energy problem in Colombia; hijackinga plane with 37 people on board on 20 February; kidnapping the indepen-dent candidate Ingrid Betancourt on 22 February; almost 200 killingsduring the rest of the year; attempting to murder Mr Pastrana during hisvisit to Italy by planting a 200-kg bomb in Florence, which was fortunately

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located and deactivated; the attacks during the swearing-in ceremony ofPresident Álvaro Uribe; threatening 1,098 mayors, leading 120 to resign;and, on 11 November, kidnapping the Archbishop of Zipaquirá, MonseñorJorge Jiménez, president of the Latin American Episcopal Council, whowas freed days later in a brilliant military operation. It is not known whowas responsible for the murder of the Archbishop of Calí, Monseñor IsaíasDuarte Cancino, on 16 March.

By comparison, the National Lliberation Army (ELN) was much morerestrained in its terrorist actions, the most significant being the kidnappingof 27 people in a national park on 21 August. The United Self-DefenceForces of Colombia (AUC), an extreme right-wing paramilitary group,announced their disbandment and the end of their links with drug traffick-ing, although they will remain divided into a series of small groups with-out a common commander. They may soon agree to a permanent cease-fire.

Government military action began to reap some successes that indi-cate an improvement in quality following the rearmament begun inJanuary, and the effects of the Colombia Plan. Proof of this is bombing ofthe demilitarised zone in February, from which the FARC was expelled, thegood results of various clashes with these forces and the brilliantly execu-ted operation to free Monseñor Jiménez in November, three days after hewas kidnapped.

Legislative elections were held on 10 March, under the threat of theFARC. Both the Liberal and the Conservative parties lost seats in bothhouses to the independent right- and left-wing movements, which wasinterpreted as voters' wish to teach the traditional parties a lesson. In anyrate, it became clear that the Liberal Álvaro Uribe stood a very goodchance of becoming Colombia's next president.

The presidential elections held on 26 May fully confirmed these impres-sions, as the Liberal candidate Álvaro Uribe won outright, and a secondround was not needed. Although it was feared he would adopt an exces-sively harsh stance, he opted for moderation from the outset and askedthe UN to mediate in the conflict with terrorists. The Prince of Asturiasattended his swearing-in ceremony on 7 August, when he took over fromAndrés Pastrana. The FARC staged various attacks, though fortunately thelargest-scale operations were thwarted. Mr Uribe's response to theattacks was immediate: on the 8th he set up an organisation of one millioncivilian informers and on the 12th decreed a "state of internal commotion"

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(equivalent to the state of emergency) throughout Colombia for 90 days,which was extended for a further 90 on 9 November.

Colombia possesses excellent natural resources, particularly hydrocar-bons and mines, and a healthy agricultural sector. It has carried out majorstructural reforms and receives aid from the international community.However, the social tension caused by terrorism and the high unemploy-ment rate clearly affect its economic development. Real GDP growth isexpected to amount to 1.2 percent (versus 1.6% in 2001) and inflation tosix percent (compared to 7.7% in 2001). External debt is very high, at $33billion, though it has fallen somewhat. The slight trade surplus will amountto some $800 million ($500 million in 2001). The overall country risk ismoderately high.

Between January and May Peru witnessed several outbreaks of ter-rorism for which different groups were responsible, including SenderoLuminoso and the "Tupamaro" Movement. However, the main causes ofsocial turmoil were undoubtedly the clash between the AguarunaAmazonian Indians and the colonists whom they accused of appropriatingtheir lands in the north-east of the country in January, which ended in 30deaths, and the June uprisings in Arequipa, Tacna and other parts ofsouthern Peru, in protest against the privatisation undertaken by MrToledo's government.

The decline in Mr Toledo's authority during the year, due mainly to theopposition from various sectors to his liberalisation measures, was very con-siderable. In addition to having to overcome the government crisis in July,his party, Possible Peru, suffered a major setback in the regional and muni-cipal elections on 17 November when it was defeated in at least ten regionsby Alán García's APRA and in the local councils, including Lima, whichpassed to Luis Castañeda, of the National Unity Conservative alliance.

However, the president's resounding success—getting all Peru's poli-tical parties and social forces to sign the National Agreement onGovernance on 22 July, with the inestimable help of former president ofthe Council of ministers Roberto Dañino—will one day be recognised. Theagreement is aimed at consolidating democracy, alleviating poverty andachieving equitable sustained growth through a set of 20 state policiesthat will be binding for governments over the next 20 years.

Other matters of interest were the deaths of Fernando Belaunde Terry,president of Peru between 1963 and 1968 and between 1980 and 1985;

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the sentencing of Álvaro Montesinos to nine years' imprisonment in July;and the repeated grotesque declarations of Mr Fujimori, from Japan,claiming he will stand for the elections in 2006. On a positive note, men-tion should be made of the award of the Spain's Planeta Prize for literatu-re to the Peruvian writer Alfredo Bryce Echenique.

Peru has major gas deposits and considerable mineral resources andfisheries. It receives support from the international community and hascarried out major structural reforms, which should influence its economicdevelopment considerably. However, it faces the daunting challenge ofcombating poverty and social inequalities. Real GDP growth is expectedto amount to 3.5 percent (compared to 0.2% in 2001) and inflation to 1.2percent (versus -0.1% in 2001). Although Peru's external debt is a veryhigh $29.5 billion and servicing it is very costly, it has diminished some-what. Its trade surplus will amount to some $200 million (in 2001 it recor-ded a deficit of $100 million). The overall country risk is high.

The presidential elections in Ecuador took place in two rounds. In thefirst, held in October, it became clear that two opposing ideological stan-ces would be pitted against each other in a second round: the group head-ed by the former colonel Lucio Gutiérrez, who led a coup several yearsago, and the group led by the multimillionaire and owner of an agriculturalcorporation, Álvaro Noboa. Lucio Gutiérrez won the second round on 24November by a slim margin and thanks to the votes of the indigenouspopulation. Although he was initially dubbed as a "Chavista", his presi-dency will no doubt be highly beneficial to the country if he manages tomaintain a moderate position.

Ecuador has significant natural resources—oil, agriculture and fishe-ries—and receives aid from the international community. However, it hasyet to command the political support it needs to carry out the structuralreforms it requires, and this is plunging the population even deeper intopoverty. Even so, thanks to dollarisation, its economic indicators areacceptable. Real GDP growth is expected to amount to three percent (asopposed to 5.6% in 2001) and inflation to 11.2 percent (versus 22.4% in2001). Its external debt is stable at $13.5 million. The balance of trade isexpected to be slightly unfavourable, around -$800 million (-$500 in 2001).The overall country risk is very high.

In Bolivia, the presidential elections held in two rounds in June and Augustended in victory for the former president Gonzalo Sánchez de Lozada, of theNationalist Revolutionary Movement (MNR), over his opponents Manfred

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Reyes Villa, of the New Republican Force (NFR), Evo Morales, the leader ofthe cocoa leaf producers of the Movement Towards Socialism (MAS), andother candidates from parties commanding less popular support. MrSánchez de Lozado took over as president from Jorge Fernando QuirogaRamírez on 6 August. The Prince of Asturias attended the ceremony.

The former President Hugo Banzer, who governed the country first asa dictator between 1971 in 1978 and subsequently as a Democrat be-tween 1997 and 2001, the year he was forced to resign due to cancer, diedin May at the age of 75.

A report published by the press in August claims that, although veryslowly, the cultivation of palm hearts is gaining ground over cocoa leaf duelargely to Spanish co-operation. The process of winning the war on thedrug trade would be speeded up tremendously if the North American mar-ket were to open up its frontiers.

Bolivia has sizeable mining and hydrocarbon resources, which attractforeign investors. The economic readjustments made over ten years agohave helped the country achieve its current relative stability. It enjoys aspecial relationship with MERCOSUR, which affords it access to theimportant Brazilian and Argentine markets. Real GDP growth is expectedto amount to 1.9 percent (compared to 1.2 percent in 2001) and inflationto 1.8 percent (versus 0.9% in 2001). The country's external debt, $4.3billion, is relatively very high, though it has decreased slightly. The tradedeficit will amount to some $500 million, more or less the same as in 2001.The overall country risk is high.

THE SITUATION IN THE MERCOSUR COUNTRIES PLUS CHILE

This is undoubtedly the most important area of Ibero-America. Of thefive countries it comprises, one (Paraguay) is landlocked, three are locatedon the Atlantic coast (Brazil, Uruguay and Argentina) and one on thePacific coast (Chile).

Its area, over 12.6 million sq km, is equivalent to 25 times the size ofSpain and accounts for over 63 percent of the whole of Ibero-America. Itspopulation of 234 million inhabitants is equal to almost six times Spain'spopulation and over 46 percent of that of Ibero-America. Although itspopulation density is low, less than a quarter of Spain's, its high demo-graphic rate will lead to a significant increase in a few years' time.

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The breakdown of the area's GNP, on average, is as follows: 10 percentoriginates from the primary sector, 30 percent from industry and 60 percentfrom the services sector. The unemployment rate is around 10 percent forthese countries as a whole, though it is particularly high in Argentina,Paraguay and the Uruguay (25, 18 and 15 percent, respectively). The popu-lation is growing fairly steadily at an annual rate of nearly one percent inthese countries on average, although it is 2.57 percent in Paraguay, and lifeexpectancy at birth is some 75 years in all the countries except Brazil,where it stands at 64. The literacy rate is over 90 percent in all these coun-tries, except for Brazil, where it is 83 percent. The percentage of populationliving beneath the poverty line is low in Uruguay (6%), high in Brazil andChile (22%) and very high in Argentina and Paraguay (37%).

2002 was a testing year for Brazil's economy for two basic reasons:Argentina's economic crisis and the uncertain outcome of the elections inOctober. And this was in addition to a situation of economic recession inthe two most important trade blocs, the United States and the EuropeanUnion, which led to the depreciation of the real at the beginning of the yearand an alarming rise in the premium that measures country risk. The sup-port promised by the United States following the visit to Brazil of theTreasury Secretary Paul O'Neill in August facilitated the longed-for agree-ment with the IMF and calmed things to an extent. Following this,President Cardoso managed to sign a valuable pact with the main electioncandidates in October ensuring respect for the conditions established bythe IMF for continued aid.

The lengthy run-up to the elections saw a rise in the expectations of theleft-wing Workers' Party contender, Luiz Inacio "Lula" da Silva, whom thepolls placed second, behind the centre-left candidate Ciro Gómes andahead of the presidentialist candidate José Serra and the populist AnthonyGarotinho. The shift towards a more moderate stance as time elapsedenabled Lula da Silva to improve his chances to the point of becoming theclear favourite after the TV debates with the other candidates. He won the6 October elections, but with an insufficient margin. After the secondround on 27 October, which he again won, this time with 61 percent of thevote, he became the President with the highest percentage of the vote inBrazil's history. He will take over as president on 1 January 2003. Hisdeclarations of "honouring all the contracts signed by the Brazilian govern-ment" and the promise that there will be no "sudden changes" dispelledall doubts about the country's economic future. The slogan "we want adecent country" had triumphed.

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Brazil possesses substantial natural resources and a diversified eco-nomy. It also has the support of the international financial community. Thevarious depreciations of the real have help stabilise the currency andimprove the trade balance. The new political era that is beginning with Lulada Silva as president should enable the reforms under way to be comple-ted, for interrupting them would be very counter-productive for thenation's economy. This year real GDP growth is expected to amount to 1.3percent (compared to 1.5% in 2001) and inflation to 7.6%, similar to lastyear's figure. Foreign debt, although dropping slightly, remains very high:$235 billion. The depreciations will ensure a favourable trade balance of$11.2 billion, much higher than last year's $2.7 billion. The overall countryrisk is nonetheless high.

In Argentina the year was ushered in by continuous "pan banging" inprotest against the economic policy of Eduardo Duhalde's government,which shortly afterwards decided to put an end to "dollarisation", abolish-ing the parity of the peso with the dollar and giving rise to a progressiveand marked depreciation of the peso. The chaos that ensued was basi-cally due to the freezing of bank deposits, referred to as the corralito, toprevent bankruptcy, recognition of Argentina's inability to service its exter-nal debt and the impossibility of implementing a credible economic pro-gramme for the IMF and EU to prevent social tension from mounting evenfurther.

Galloping inflation caused the price of the shopping basket to doublein March. People started to go hungry, leading to looting and vandalismacross the country. Compliance with the conditions imposed by the IMFwas only possible through a pact between the government and the pro-vinces. In April the economy minister, Jorge Remes Lenicov, resigned andhis department was taken over by Roberto Lavagna.

Throughout May the conditions required by the IMF for reaching anagreement began to be met: Mr Duhalde managed to earn first the confi-dence of the Peronist governors and then the parliamentary supportnecessary to repeal the "Economic Subversion" law and amend theBankruptcy law. Despite this progress, the violent demonstrations stagedin June were brutally repressed by the police and two people were killedand many were injured.

The tough negotiations with the IMF continued in the following months,during which the Fund established a political consensus as a requirement.A favourable development was Mr Duhalde's announcement, after reach-

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ing an agreement with the governors, of a definitive date for the presiden-tial elections: 27 April 2003.

As of the end of November, Argentina's image is that of a people whoare resigned, unable to come to terms with how a country with such richresources has been plunged into such a situation. An idea prevails in peo-ple's minds: the political class is one hundred percent corrupt. "Out withthem all" has been the most frequently uttered slogan during this unfortu-nate year that is now drawing to end. Meanwhile, the news of childrendying of malnutrition in Tucuman, no doubt a preview of what will occur inmany other places, continued to rock the world. The only ray of hope is theslow progress, which appeared to be made in November, towards theminimum conditions laid down by the IMF for an agreement.

Argentina possesses substantial natural resources, developed agricul-tural and food sectors and a skilled work force. The deterioration in its poli-tical and social circumstances and the unfavourable developments in itseconomic situation and inability to service its foreign debt have caused it tointerrupt the dollarisation process and, furthermore, have lost it almost allits international financial support. Real GDP looks set to drop by 11.3 per-cent this year (as opposed to a fall of 4.45 percent in 2001) and inflation tosoar to 58 percent (compared to -1.55 percent in 2001). Its external debt isvery high, $158 billion, and serving it accounts for 75 percent of exports. Itstrade surplus of approximately $17 billion (versus $6.3 billion in 2001) is thecountry's only positive indicator. The overall country risk is very high.

The decision made by Uruguay in June to allow the currency to floatand abandon the price band system in force since 1992 worsened theeconomic and social crisis and gave rise to situations similar to those wit-nessed in Argentina and Brazil. As a result, the value of the dollar rose by40 percent, inflation rocketed and banking activity came to a standstill.

The IMF made any possible aid conditional upon the restriction of with-drawals of fixed-rate deposits, a measure which created huge social ten-sion. As in Argentina, establishments began to be looted and acts of van-dalism were committed. The uncertainty continued until the beginning ofAugust, when the reforms required to secure IMF aid were begun. Thisenabled the sum of $1.5 billion granted in May to be raised to $3.8 billion.Although this helped calm things down somewhat, the economic resultsfor 2002 are expected to be very poor.

Uruguay has a diversified economy with substantial agricultural andservices sectors and a skilled labour force and is fairly stable politically,

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although the structural reforms that would ensure economic developmenthave yet to be completed. During the year, the Uruguayan economy, ordi-narily buoyant, was affected by the turmoil in Argentina. Real GDP isexpected to fall by 10 percent (in 2001 it shrank 3.1%) and inflation looksset to hit 35 percent (compared to 3.6 percent in 2001). The country'sexternal debt is likely to drop to $7 billion and its trade balance, which isnormally unfavourable owing to the preponderance of the agricultural sec-tor, should close the year at practically zero. The overall country risk ismoderately low.

In Paraguay, the opposition staged spectacular protests againstPresident Luis González Macchi, demanding he resign owing to the deterio-ration in the country's economic and social situation. Supporters of LinoOviedo, the former general who led a coup several years ago, were evidentlyinvolved. The demonstrations were supported by the Liberal vice-president,Julio César Franco, who has held his present post for two years thanks toOviedo's support and hopes to succeed Mr González Macchi. On 15 Julythe government decreed a state of emergency throughout the country andproceeded to crack down brutally on the demonstrators and called on thearmed forces to intervene. Two people were killed and over 100 were woun-ded. The situation aroused the mistrust of the neighbouring countries,Argentina, Brazil and Bolivia, which reinforced their borders with Paraguay.On the 17th the government lifted the state of emergency. The behaviour ofJulio César Franco may have seriously affected his political future. At theend of November, the resignation of members of the government's team ofeconomic experts as a result of the constant interference of the politicianswith their work placed the country on the verge of bankruptcy.

Paraguay has a healthy and open economy with thriving agriculturaland livestock sectors and major hydroelectric resources. Its economicdevelopment over the past few years has been constrained by its relativepolitical instability and by the delayed implementation of the necessarystructural reforms. Real GDP growth this year will be very close to zero (itwas zero in 2001) and inflation is expected to amount to 20 percent (asopposed to 13 percent in 2001). Its foreign debt, $3 billion, has diminishedslightly. The balance of trade will be practically zero (compared to -$500million in 2001). The overall country risk is high.

Chile succeeded in signing a free trade-agreement with the EU duringthe EU, Latin America and Caribbean Summit in May. This is a very impor-tant achievement, since neither MERCOSUR nor the Andean Community

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managed even a commitment of this nature. What Chile aims to accom-plish next is a free-trade treaty with United States.

Although in July the Supreme Court finally dropped the case againstGeneral Pinochet, who resigned from his post as life senator, it seems thatjustice could reconsider stripping him of immunity. In any case, 16 of hisformer military chiefs were convicted in August of the murder of a tradeunion leader in 1982. The defence minister contends, and rightly so, thatthe defence minister's power to appoint armed forces commanders-in-chief should be restored.

Chile possesses considerable mining resources and fisheries, a healthyeconomy and a stable political system. Its economic results depend great-ly on its copper exports and oil imports. It also has a major unemploymentproblem. Real GDP growth this year is expected to amount to 2.2 percent(compared to 2.85 percent in 2001) and inflation to 3.3 percent (versus2.6% in 2001). The country's foreign debt is a hefty $37 billion. Its tradesurplus will amount to $2.8 billion, somewhat higher than in 2001. The ove-rall country risk is low.

MILITARY EFFORT

The information provided in this section is taken from the MilitaryBalance 2001-2002 yearbook and generally relates to 2001. The indicatorsdo not take into account the structure of defence expenses. No data areprovided for Costa Rica or Panama, as these countries do not have armedforces. The purpose of the classifications is merely to allow comparison.

The various local economic crises that are related in varying degrees tothe grave situation in Argentina on the one hand and, on the other hand,the lack of conflict, except in Colombia, explain these countries' stagnantdefence budgets.

Brazil has set in motion the Phoenix Plan to modernise its air force, towhich a total of $3.5 billion will be allocated over the next eight years,including $700 million to build 24 modern fighter jets. It seems that theBrazilian company Embraer, which has links with French industry, will buildmost of these aircraft. In addition, the old aircraft carrier Minais Gerais hasat last been replaced by one that is considerably better equipped, theFoch, recently acquired from France, which had been withdrawn from ser-vice and has been renamed the Sao Paolo.

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Colombia has been awarded a further $500 million on top of the initialUS military aid package of $1.3 billion in order to step up the fight againstdrug trafficking. The most costly items, 18 UH-60 Black Hawk helicopters,were delivered at the end of 2001.

Mexico, owing perhaps to the increase in oil exports to the UnitedStates, has signed a contract with Brazil's Embraer to build an aerial earlywarning and control aircraft (AEW&C) and two EMB maritime patrol air-craft.

Economic defence effort is normally closely related to a country'sGross National Product (GNP) and size. The respective efforts of the Ibero-American nations are as follows:

— High (more than $1 billion per year): Brazil $8.8, Argentina $3.1,Mexico $3, Chile and Colombia $2.1 and Venezuela $1.96 billion.

— Medium (between $1 billion and $500 million per year): Peru $827million.

— Low (less than $500 million per year): Ecuador $400, Uruguay $367,Bolivia $130, El Salvador $112, Guatemala $108, the DominicanRepublic $103, Paraguay $81, Honduras $35, Cuba $33 andNicaragua $27 million.

Relative economic effort, or the percentage of GNP each country allo-cates to defence, reflects the importance it attaches to defence matters.Effort can be classified as follows:

— High (more than two percent): Uruguay 2.60%, Colombia 2.59%,Chile 2.41%, Venezuela 2.16%, and Ecuador 2%.

— Medium (between two and 1.5 percent): none.

— Low (less than 1.5 percent): Bolivia 1.38%, Brazil 1.37%, Peru1.25%, Argentina 1.10%, El Salvador 1.06%, Nicaragua 0.87%,Paraguay 0.85%, Dominican Republic 0.76%, Guatemala 0.73%,Honduras 0.60%, Mexico 0.54% and Cuba 0.20%.

The human defence effort refers to the total Armed Forces personnel.This is classified, in thousands of persons, as follows:

— High (more than 100): Brazil 288, Mexico 193, Colombia 158 andPeru 100.

— Medium (between 100 and 50): Chile 87, Venezuela 82, Argentina70 and Ecuador 59.

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— Low (less than 50): Cuba 46, Bolivia 32, Guatemala 31, DominicanRepublic 25, Uruguay 24, Paraguay 19, El Salvador 17, Nicaragua16 and Honduras 8.

Relative human effort is the total number of military personnel per thou-sand inhabitants for each country. It reflects the importance attached todefence. The categories are as follows:

— High (more than three military per thousand inhabitants): Uruguay7.1, Chile 5.7, Ecuador 4.6, Cuba 4.1, Peru 3.8, Bolivia 3.7,Colombia 3.6, Venezuela and Paraguay 3.3, and Nicaragua 3.1.

— Medium/high (between three and two): Dominican Republic 2.8,Guatemala 2.7, and El Salvador 2.6.

— Medium (between two and one): Mexico and Argentina 1.9, Brazil1.7, and Honduras 1.3.

As an indicator of quality of equipment we have chosen the arbitraryfigure equivalent to one-fifth of the result of dividing defence expenditureby total number of military personnel. The levels are as follows.

— High (over $4,000 per person per year): Argentina $8,850, Brazil$6,120, Chile $4,800 and Venezuela $4,700.

— Medium (between $4,000 and $2,000): Mexico $3,100, Uruguay$3,070 and Colombia $2,660.

— Low (under $2.000): Peru $1,650, Ecuador $1,350, El Salvador$1,330, Paraguay $870, Honduras and the Dominican Republic $840,Bolivia $830, Guatemala $690, Nicaragua $340 and Cuba $140.

Although the military effort indicators provided for the Ibero-Americancountries may not be entirely accurate, if we compare them with the indi-cators for 2001 we may deduce that relative effort, both economic andhuman, has generally not varied. The same is true of quality of equipment.

RELATIONS WITH THE UNITED STATES AND THE EUROPEANUNION

In April Chile and EU agreed on the basic points of a wide-ranging freetrade agreement. The commitment was signed at the Madrid summit on17 May. It envisages the progressive abolishment, over a seven-yearperiod, of tariffs, restrictions and quotas.

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On the eve of the Madrid summit, President Aznar and the USPresident, Mr Bush, met at Camp David to exchange points of view andco-ordinate different aspects of their respective government policies,including, in particular, Ibero-America and the delicate economic situationof some of these countries, and the war on terrorism.

The 2nd summit of heads of state and government of the EuropeanUnion, Latin America and the Caribbean took place in Madrid on 17 and18 May and was attended by 52 delegations. Messrs Castro and Chávezsent representatives. The agenda included many issues of great interest,such as human rights, democracy, co-operation against terrorism anddrug trafficking, trade between the EU and Ibero-America, the integrationprocesses, technical backwardness and sustainable development.

Although the aforementioned agreement, the second of its kind afterthe EU-Mexico accord, was concluded between the EU and Chile, itbecame clear that for the time being it will not be possible to sign anothersimilar agreement with MERCOSUR, despite both sides' interest. It wasdecided to hold meetings every six months to boost the necessary nego-tiations. Demonstrations were staged by the anti-globalisation groupswhich, as usual, commanded the support of the most left-wing parties.One of the keys to the Madrid commitment was the EU's statement of itsintention to conclude co-operation agreements with Central America andthe Andean Community. The negotiations will begin in 2004 and 2005,respectively.

Without undue haste, the United States carried on with the process ofcreating the Free Trade Area of the Americas (FTAA), which is due to becompleted in 2005. For this purpose it maintained contacts with differentIbero-American countries during the year, particularly Brazil, Argentina andUruguay.

Furthermore, on 6 August President Bush enacted the so-called TradePromotion Authority, commonly known as "fast track" authority. This willallow him to negotiate trade agreements with the countries of the regionwith certain guarantees of parliamentary support for a five-year period.The act also renews the Andean Trade Preferences Act, which grants tariffrelief to certain products from Colombia, Peru, Bolivia and Ecuador, coun-tries which in turn undertake to collaborate in a fighting drug trafficking.The United States adopted similar measures with respect to its trade rela-tions with Guatemala.

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THE 12TH IBERO-AMERICAN SUMMIT

The 12th Ibero-American Summit of Heads of State and Governmentwas held at Punta Cana (Playa Bávaro, Dominican Republic) on 16 and17 November. It was attended by his Majesty the King and representa-tives of the 21 countries, including Portugal and Spain. The Cuban,Panamanian and Peruvian presidents, Fidel Castro Panama, MireyaMoscoso and Alejandro Toledo, did not attend personally, and sentrepresentatives.

The Punta Cana Declaration focused on three main issues. First, all theIbero-American nations called upon both the European Union and theUnited States to dismantle the existing anti-liberal protectionist barrierswhich, in the case of Europe, are due to be in force until 2013. Second, allthe participants underlined their willingness, as requested by King JuanCarlos, to show greater commitment and greater co-ordination in fightingterrorism in all forms, including the first outbreaks of Islamic fundamenta-lism detected in South America. Finally, they stressed the need to assessmigratory flows from the Ibero-American countries towards the EuropeanUnion and, very specifically, towards Spain and Portugal, host nationswhich are asked to put in place a balanced policy with respect to taking inimmigrants.

The proposal tabled by the Spanish president, José María Aznar, ofadopting a set of measures designed to give fresh impetus to the summit,was approved unanimously and greatly celebrated. In order to implementsuch measures, the Brazilian president, Fernando Henrique Cardoso,upon stepping down from his post on 1 January, will chair a working groupthat is due to submit reports on several areas to be studied at the nextsummit, which will take place in Bolivia in November 2003. The first ofthese issues is the stance with respect to countries wishing to join theIbero-American Community, one of which is Puerto Rico. The secondpoint to be studied is whether to transform the Secretariat for Ibero-American Co-operation, which is based in Madrid, into a permanent secre-tariat; this would be more operative and could represent the Community atmajor international forums. And lastly, the current organisation of the sum-mits needs to be reviewed in order to adapt it progressively to a schemethat is more similar to that of the European Union and, in particular, sec-torial ministerial meetings and Ibero-American development co-operationshould be fostered.

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SPAIN AND IBERO-AMERICA

In 2002, as in previous years, relations between Spain and the Ibero-American countries have been intense.

On 16 May Their Majesties the King and Queen granted audience tothe heads of state and government attending the Madrid summit. On 15and 16 November they attended the 12th Ibero-American summit held inthe Dominican Republic and, immediately afterwards, paid a state trip toMexico from the 17th to the 20th.

On 29 April His Majesty the King received the Brazilian minister offoreign affairs. On 8 November he officially opened the Ibero-AmericanForum in Toledo. As regards cultural affairs, on 24 April he presented theCervantes Prize for literature to the Colombian writer Álvaro Mutis.

The Prince of Asturias attended the swearing-in ceremonies of the pre-sidents of Nicaragua (10 January), Honduras (28 January), Costa Rica (8May), Bolivia (6 August) and Colombia (7 August). Likewise, on 21 Octoberhe officially opened the "10th Ibero-American Conference of Ministers forYouth Affairs" in Salamanca and the "10th anniversary of the Ibero-American Youth Organisation". On 10 November he delivered the closingspeeches at the Ibero-American Forum in Toledo, stressing the impor-tance Spain attaches its pivotal role in the EU's relations with Ibero-America. On 20 November he opened the European Forum of Ibero-American Enterprises in Madrid.

Aside from his regular relationship and almost daily telephone conver-sations with different Ibero-American presidents, President Aznar's activi-ties relating to Ibero-America were particularly intense, especially duringSpain's presidency of the European Union during the first half of the year,though also on account of his participation in different international forumsrepresenting Spain. On every occasion, whenever appropriate, he calledfor international aid for Argentina and other Ibero-American countriesaffected by economic crisis. In this respect, his participation in the meet-ings of the UN Forum on Financing for Development, held at Monterrey(Mexico) at the end of March, the World Food Summit held in Rome inJune, the G-8 Summit in Kananaskis (Canada) at the end of that samemonth and the World Summit on Sustainable Development or "EarthSummit" in Johannesburg (South African Union) in September, as a follow-up to the Rio Summit of 1992, was particularly important.

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A foundation with close links to Ibero-America was set up in Madrid inJanuary: the Elcano Institute. Conceived as a centre for providing thegovernment with analyses of and proposals for international and strategicmatters, it will undoubtedly play a decisive role in consolidating Ibero-America's position on the map of the world of well-being, which coincideswith that of democracy and liberalism.

The Course on Higher Strategic Studies for high-ranking Ibero-American officials, which was organised by the Centre for Higher NationalDefence Studies (CESEDEN) and held in Madrid during the first quarter ofthe year, was described by the Spanish defence minister as "a first step"towards shaping the common future of the armies of the Ibero-AmericanCommunity so that its military "can think and plan together" based on theshared principle of "peace, justice, freedom and solidarity of their peoples".

On 7 May Madrid hosted the 10th Summit of Mayors of Ibero-AmericanCities—26 Ibero-American capitals plus Madrid and Barcelona—an insti-tution which has completed its 20th year of existence and is an instrumentfor exchanging experiences which are always of great interest.

A meeting took place on 13 May to establish the Madrid Club as under-taken at the Conference on Democratic Transition and Consolidation inOctober 2001. Former presidents and prominent politicians from 27 coun-tries, many of them Ibero-American, will participate in this forum, which isintended to support democratic transition. It will be chaired by FernandoHenrique Cardoso, who will take up his post when he steps down as pre-sident of Brazil.

FINAL REMARKS

During the year that is now drawing to a close, the greatest causes forconcern in Ibero-America are the social situation in the AndeanCommunity and Central America and the Caribbean where, respectively,65 and 45 percent of the population lives beneath the poverty line (under$1 per capita per day), the grave economic crisis in the MERCOSUR coun-tries, the political conflicts in Colombia and Venezuela and Castro's dicta-torship in Cuba.

The United States' economic embargo on Cuba is growing increasinglyunpopular; even many American high-ranking officials and intellectualsregard it as counter-productive and unfair.

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"Globalisation", through its mechanisms and economies of scale, is aprogress factor. Aside from ignoring its positive contribution, its oppo-nents—who are generally nostalgic for Marxism-Leninism—are unwillingto admit that the system that inspires them, apart from being an iron-fis-ted dictatorship that was as heinous as Nazism but caused ten times asmany deaths (100 million as opposed to 10 million), had much of mankindliving in dire poverty for over 70 years.

The US's FTAA project should not hinder but complement other free-trade initiatives undertaken by the Ibero-American countries, particularlythose focusing on Europe.

Populistic systems often fail to restrict public spending sufficiently orkeep external debt in check. This gives rise to situations where countriesare no longer able to service their debts and are drawn into a spiral lead-ing to economic collapse.

During the year, as a result of the US initiative, the co-ordination ofcounterterrorism between the United States, Ibero-America and theEuropean Union improved considerably. The effects will be felt on bothsides of the Atlantic.

Many Ibero-American countries are clearly disillusioned with their stillincipient democracies, which have failed to eradicate corruption. ManyIbero-Americans attach greater importance to their household economiesthan to the old ideological debates and to enjoying a system of freedoms.

The serious economic crisis the MERCOSUR countries are experien-cing can only be overcome if they adopt structural measures that convin-ce the IMF.

The dubious political behaviour of some presidents elected this year,who in principle seem akin to Mr Chávez, is causing concern in and outsi-de Ibero-America.

2002 was a very good year for Mexico and Chile. For Mexico, becauseits economy seems to have secured it the position of leading Ibero-American power, and for Chile because, despite difficulties, it is overcom-ing the transition, has achieved very good economic results and hassigned an important trade agreement with the European Union.

Spain, in co-ordination with Portugal, should continue to act as abridge between Ibero-America and the European Union.

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CHAPTER SIX

AFRICA

AFRICA

By Alejandro Cuerda Ortega

Few developments in sub-Saharan Africa have managed to attract theworld's attention this past year (2002). Nor has the—as usual—pessimis-tic news had much of an impression on the developed world, which soonforgets scenes that are no novelty. Many people in the West wonderwhether it is worth while making an effort to improve the lot of this long-suffering continent which it perceives as remote, even though nowadaysdistances mean nothing. But Black Africa is a continent of 650 millionexpectant people: many of them are hoping for a day's sustenance, othersfor the arrival of aid from the powerful countries, and others still for thechance to escape to the white world or merely to the nearby big cities thatare sprawling into huge pockets of poverty; others hope for some impro-vement in their lives or in their environment, maybe not much but probablywith enthusiasm because Africa's population is largely young and easy toplease; and many are merely waiting for the end of their existence, be-cause 340 million people live on less than one dollar a day and 24,000 dieof starvation in the world, also every day.

It is well known that, given the precarious conditions in which manypeople of Black Africa live, any major climate change is a threat to thou-sands of people whose only means of subsistence is the fragile produceof the land. This year, once again, 13 million people in southern Africa—43percent of the population—were in danger of starving to death after theircrops were devastated by flooding and subsequently droughts.International organisations, particularly the UN, appealed for urgent foodaid. In September, particularly in Malawi, tens of thousands of people weredying.

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But this fragile and uncertain lifeline—simply managing to eat everyday—has snapped on other occasions and in different parts of the conti-nent for many reasons, such as wars, exploitation of the weak, plunderingof resources, political persecution, plagues, paralysing diseases and mis-management and corruption, which go hand-in-hand. This is the case ofMalawi, where the plight of the 3.2 million hungry people was worsened bythe government's fraudulent sale of grain reserves to Kenya and togovernment workers at below-cost price, causing losses of $40 million.The problem of famine in the area has also worsened as a result of seve-ral of the countries' refusal to accept genetically modified grain offered bythe UN World Food Programme (WFP).

Sub-Saharan Africa and was also rocked by a series of conflicts andclashes, wars, massive population displacements and violence as the onlydialectic during 2002. These are summed up as follows:

— Angola: the war, which had been dragging on for 27 years, lasteduntil April, when a peace treaty was signed. The rebel guerrilla fight-ers in the Cabinda enclave continued. The country is devastated.

— Burundi: the cruel civil war continued, despite the efforts of theUnited Nations and Nelson Mandela.

— Central African Republic: old quarrels resurged in October and werequelled by government troops with the help of Libya.

— Côte d'Ivoire: the military uprising in September caused 340deaths. A ceasefire was reached in October. The country is nowdivided into two zones, north and south.

— Democratic Republic of the Congo: the signing of the peace treatywith Rwanda in July may have put an end to the bloody four-yearwar. The troops of the five invader nations have withdrawn, butrebel factions, hatred, weapons and riches are still rife—a worryingcombination for a very weak government.

— Guinea-Conakry: Constant skirmishes between guerrilla fighters atthe border with Sierra Leone and Liberia.

— Liberia: Clashes between the government and the guerrilla groupLURD (Liberians United for Reconciliation and Democracy).Attempts at negotiating peace were made in September andOctober. There are currently 165,000 displaced people.

— Senegal: Casamance pro-independence uprising continues.

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— Sierra Leone: the bloody civil war against the RUF (RevolutionaryUnited Front) seems to be drawing to an end. The UN organised thewithdrawal of MINUSIL (17,500 soldiers). There are thousands ofrefugees in concentration camps and hundreds of mutilated peo-ple.

— Somalia: country divided and dominated by warlords. In Octoberattempts were made to achieve a very difficult reconciliation. Actsof vengeance and sporadic clashes continue.

— Sudan: 19 years of war between the Muslim north and the Christiansouth. Any truces reached last only hours. The US pressed forpeace. A new ceasefire in October.

— Uganda: ten years of guerrilla actions and slaughters supported bySudan.

However, having referred to the negative aspects, which we shouldperhaps recognise as constant features of sub-Saharan Africa for manygenerations to come, we should point out that many circumstances pointto hopes of pacification and development, the signs of peace. And a trulyvaluable and promising development is that African organisations and lea-ders are repeatedly talking of shedding their egotism, hatred, dictatorialregimes, corruption and violation of human rights; of the pressing need tofocus their attention and efforts on the people and their basic requirementsand endeavour jointly to steer these nations towards development andimprove production and trade, by reinforcing their civil society and res-cuing the African identity, that which is specific to their society, its valuesand principles.

On 30 July a peace agreement was signed by Rwanda and theDemocratic Republic of the Congo (DR Congo) and two months laterforeign troops withdrew. In Angola, devastated by 23 years of civil war, theprocess of rebuilding peace and the nation itself is progressing, albeit withhuge difficulties. The settlement of the conflict between Ethiopia andEritrea, another of Africa's recent horror stories, has been upheld. AndMozambique has progressed from 16 years of civil strife and a post-warperiod beset with huge difficulties and floods that rocked the world topowerful development. Positive signs of peace have been glimpsed inSudan and Côte d'Ivoire and between chaotic Somalia's 22 discordantwarring factions. These are clear signs of the pacification of the continent,which must be appreciated and actively supported.

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On another note, the established of the African Union (AU) has arousedhopes and excitement, as has the New Partnership for AfricanDevelopment (NEPAD), which we will discuss further on. The continentneeded a lofty cause to unite its political, economic and social forces andthese two organisations have provided just that; both need to be deve-loped, completed and carried forward with hope and effort, but their firststeps constitute a promise and deserve confidence and firm support, as ifthey were Africa's last opportunity to start going it alone. It is surprising tonote the collective enthusiasm they have aroused and the extent andimpact of the appeals for good governance.

We should not omit to mention the good news that the desert is begin-ning to shrink in the Sahel, as evidenced by the comparison of satellite pho-tographs. The plant cover has grown in parts of southern Mauritania, north-east Niger, the north of Burkina Faso, central Chad and parts of Sudan andEritrea—an encouraging phenomenon that has enabled many farming fami-lies to go back to working the land and enjoy a means of subsistence.

To end this review of Black Africa, towards the end of the year encou-raging news came of an agreement that had been reached at the ministe-rial meeting of the World Trade Organisation (WTO) in Sydney (15November 2002) on the production and sale of generic drugs to combatThird-World epidemics such as AIDS, malaria and tuberculosis, whichclaim millions of lives. So far the unlucky ones infected with these disea-ses have had no choice but to await their death, almost always in a stateof neglect, as they lack the means to acquire the costly medicines availa-ble in the developed world.

Thanks to the courageous decision of India and Brazil, the productionof these patented medicines at a very low cost had been authorised forexclusive use in poor countries, but they could not be marketed; as aresult, nations lacking pharmaceuticals laboratories continued to be de-prived of them. This prohibition has now been lifted. From now on, withappropriate controls, the countries least favoured by fortune with popula-tions afflicted by these devastating diseases will be able to acquire themfor their patients at very low costs. The agreement needs to be ratified atthe forthcoming WTO meeting in Geneva at the end of the year, but thereis no doubt this will occur, as the news has already reached the millions ofdying people for whom there is now hope.

I will end these introductory remarks by stating that progress is beingmade in Black Africa. Millions of starving people have been saved; many

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hospitals, schools and wells have been built; life expectancy has risen byfour or five years; dictatorial governments are being harassed and isolatedand are loosening their grip; and in many nations it is now possible to askand make demands without fear. There is still much to change and abo-lish, and a huge amount of education and training to be done, but it isworth the Western world's while to continue to strive to help these hun-dreds of millions of humans who have no wish to go back to being colo-nies, but are still unable to stand on their own two feet.

WESTERN PRESENCE IN AFRICA

— The US. During the year America continued to show an interest inAfrica, carrying on with the opening-up process that was deter-minedly launched by Mr Clinton and appears to be backed by thesecretary of state, Colin Powell: "trade, not aid", as Mr Clinton putit. In May the United States passed the Africa Growth andOpportunities Act (AGOA), which led to George W. Bush's firstmeeting with 30 African countries and high-ranking American offi-cials in Philadelphia at the end of October 2001. Washington con-siders this to be a productive law as it promotes free trade and theopening up of markets.

President Bush told the African leaders that no nation has entered viathe fast-track route without first opening up its economy to the worldmarkets. The act enables the sub-Saharan countries to export theirgoods to the US in theoretically advantageous conditions, thoughmany observers fail to see these advantages. In order to benefit fromthis law, the African countries must meet a number of conditions: eli-minate aid and the price controls to which certain products are sub-ject, step up the privatisation underway and demolish all barriers toAmerican exports and investments. However, even if the countrymeets all these criteria, its exports to America are not guaranteed, asAmerica can deny preferential treatment to some of these Africanproducts if it considers they compete with similar products of its ownor harm its trade interests in any way. These products include, forexample, coffee and sugar, traditional African produce, and textilesunless made from American fabric, yarn or thread.

Other requirements laid down by the AGOA are political. Africancountries wishing to benefit from the act must respect human

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rights and be democratically governed, in the opinion of the Bushadministration. Washington's criteria for approving or disapprovingof a government do not appear very clear, since Rwanda, Uganda,Gabon, Guinea Conakry, Chad and Madagascar, whose democra-tic systems are very dubious, feature on the list of eligible coun-tries, whereas Côte d'Ivoire and Angola, which continue to be twoof America's main African suppliers, do not.

Even so, trade is growing. In 2000 African exports to the US in-creased by 67.2 percent, while American exports to Africa by only6.4 percent. But it should be stressed that Africa exports mainlyraw materials such as oil, precious metals, diamonds and iron. AndMr Clinton's slogan of "trade not aid" is being put into practice, astrade is growing and aid is constantly diminishing. America's res-ponse to Kofi Annan's request for aid to set up a fund for fightingAIDS—for which between $7 and $10 billion are reckoned to berequired—was rather feeble: $200 million. And for the time being, ithas shown no signs of intending to reduce the African countries'debt, which stands at some $300 billion.

However, America appears intent on maintaining its commercial pre-sence in Africa. In April, the USA signed an agreement with eightAfrican countries to stimulate investments and promote economicreforms, and expressing the intention to lower trade barriers to exportsfrom the black continent—the real means of facilitating African deve-lopment, which had been repeatedly requested by the African leaders.

America's action is not limited to the sphere of trade—or perhapsits interest in trade arouses its interest in other African problems.During the first half of the year, Paul O'Neill, then US treasurysecretary, made a 12-day tour of four African countries, Ghana,South Africa, Uganda and Ethiopia. After his journey he stated thathe was very impressed and moved by everything he had seen andwilling to promote an attitude of co-operation with the Africancountries. Later on, President Bush approved an aid package of$500 million to combat AIDS in Africa. He also granted $375 millionworth of aid to Mali under the new co-operation plan (2003-2012)for health, education, administrative decentralisation and commu-nications. Also worth mentioning are the frequent visits paid byhigh-ranking US delegations to Sudan, where they have performedvaluable mediation work in the peace talks aimed at ending the civil

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war that has been dragging on 19 years, though Sudan is also anoil rich country and is located near the centres of Islamic terrorism.And America is always willing to invite and receive African leadersto discuss democracy.

However, there is one murky aspect of America's African policy thatcontradicts its campaigns for democratisation and goodwill, namelyits relations with Rwanda and Uganda. The United States had nothad any forces in Africa for nine years. Following the failure of ope-ration "Restore Hope" in Somalia in 1993, it has not ventured to sendmore troops, even when the huge-scale killings occurred in Rwandathe following year, despite the clear signs that a massacre was beingprepared. And it did its utmost to prevent the UN intervening, just asit did later, in 1996, when the refugee camps in northeast Zaire wereattacked. And more recently the US administration has not hesitatedto back, even with military assistance, these two nations' occupationof territories they have maintained for years in the eastern part of theDR Congo. This occupation, with the force of arms, has been themain cause of destabilisation and many atrocities and has only oneexplanation: the plundering of rich mineral resources from whichAmerican and European companies benefited.

However, the events of 11 September (2001) seem to have promp-ted America to reconsider its attitude of nonintervention in Africa: ithas some 800 soldiers in Djibouti, stationed at "Camp Lemonier",once a French base, special anti-terrorist units, and naval forceskeeping a close and permanent watch on Somalia, where al-Qaedarefugees are thought to hang out. It has also reactivated the AfricanCrisis Response Initiative (ACRI) programme that was launched byMr Clinton in 1996 to train and equip African intervention troops. Atthe beginning of the year, high-ranking American and British offi-cials visited Kenya's President Daniel Arap Moi to study the possi-bility of establishing an Anglo-American base from which to crackdown on terrorism in Somalia. It seems that Italy also intends to jointhis initiative.

These initiatives are causing the United Nations Secretary-GeneralKofi Annan fresh concern, given that the West's war on terrorism isnot restricted to the geographic limits of Afghanistan, as stated inthe related Security Council resolution; rather, it threatens to extendto other nations.

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— European nations. Unlike American diplomacy, that of the Europeancountries in Africa, with a few exceptions, is almost non-existentand their interest in lending aid minimal. Almost all the nations havetrimmed the proportion of GDP allocated to development assist-ance; nowadays, on average, the percentage scarcely amounts tohalf of the 0.7 percent agreed at the United Nations in 1970. France,the former colonial power that has so far been the most active inAfrica, began to withdraw its support years ago, even when it stillenjoyed this status, after gradually realising that its relations withAfrica were more troublesome than beneficial. This withdrawalbecame official in 1998 when it carried out an institutional reform ofits co-operation system and closed down its military bases in someAfrican countries. This decision was largely due to the consequen-ces of the Rwandan genocide in 1994, which called into questionFrench policy in the Great Lakes region.

Today, France appears to have clearly ceded its position toAmerica, though it has not turned its back on its old contacts andcontinues to take pride in its long relationship with that world andto defend Africa's specificity. In February, President Chirac invited13 African heads of state to Paris to promote the new NEPAD jointdevelopment initiative. He expressed concern at the scant interna-tional aid Africa receives, describing it as "unacceptable". Thisconcern is rather puzzling bearing in mind that France itself hasslashed its aid from 0.56 percent in 1994 to the current 0.34 per-cent.

Nor has Spain stood out particularly this year because of its con-cern for the problems that plague sub-Saharan Africa. Its full dedi-cation to exercising the presidency of the EU in the first half of theyear, the cooling of the European economy in general and, aboveall, its financial efforts to achieve budgetary balance—whichproved successful—diminished its ability to allocate larger sums ofmoney to development assistance (ODA) for the Third World. Thepercentage of GDP Spain has devoted to ODA in recent years issmall, 0.22 percent. This year this figure is up 0.1 percent or so butremains low. Of this aid, only 19 percent goes to sub-SaharanAfrican countries. Regrettably, the hardships and pressing needs ofsome developing countries leave no margin for coping with tempo-rary downturns in the developed countries' economies.

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Although we are dealing with European matters, it is worth pointingout that China has become active on the African continent, thoughpurely in matters of trade and industrial expansion as opposed tothe humanitarian field. It is snapping up projects and infrastructureconstruction in several countries whenever it has the chance, notto mention its various activities in previous years. In October itbegan to build a dam in Ethiopia costing $224 million.

— The European Union (EU). Unlike the individual European nations,the EU, as a multinational organisation, continues to allocate aid tothe needy African countries and it is perhaps this that is providingits member nations with an excuse for being less generous. Thisyear the earliest and most significant aid package, a total of $120million, was allocated on 21 January as part of the NIP (NationalIndicative Programme) for the DR Congo. This marked the officialresumption of development assistance for this nation, which hadbeen suspended in 1991 owing to the serious disturbances in thedemocratic process. This amount makes up the total package of$200 million granted for humanitarian assistance and reconstruc-ting the country.

Other actions include: various contacts and a fishing agreementwith Senegal, the EU's most important partner in West Africa, inJune ($16 million per year); 95,000 tonnes of food aid for Malawi;the agreement during Romano Prodi's visit to the new PresidentRavalomanana to increase aid to Madagascar by 40 percent to$577 million over a five-year period; in April, the European com-mission for development and humanitarian aid carried out a tour ofseveral West African countries, meeting their government authori-ties; the signing of a NIP with Cape Verde worth $39 million for the2002-2007 period; and an agreement worth $191 million withMauritania.

Apart from providing specific material aid, the EU, as an organisa-tion with foreign-policy aspirations, also endeavours to intervene inAfrican crises and conflicts as a mediator, arbiter, adviser or pro-moter of human and children's rights, often with considerable suc-cess, such as in the seminar held in Gabon in September to fightagainst child trafficking.

Returning to the case of the European nations individually, theirlack of interest in Africa, which is particularly regrettable given the

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urgent and critical need for food, was sadly demonstrated at theSecond World Food Summit organised by the FAO (Food andAgriculture Organisation) in Rome in June. The first summit hadtaken place in 1996, also in Rome, and a number of commitmentswere made with the aim of halving, to 400 million, the number ofhungry people in the world by 2015. There are now 840 million. Atthe second summit the FAO presented data showing that the pro-gramme launched six years ago is proving a flop. So far the num-ber of hungry people has been reduced by only 30 million—a longway off the goal of 420 million in 20 years. This will go down as yetanother promise that the powerful countries have failed to keepand another disappointment for the populations abandoned by for-tune.

The idea, in June 2002, was to assess what had happened and finda way of giving fresh impetus to the programme. But the developedworld did not seem interested. Whereas one hundred or so headsof state and government from the Third World attended the meet-ing, only two from the powerful Western world deigned to partici-pate: the host, Silvio Berlusconi, and the Spanish premier, JoséMaría Aznar, then president of the EU. We should mention that thatday, as on every other day, another 24,000 people died of starva-tion. The West's credibility took a serious knock.

South Africa's president Thabo Mbeki expressed his disappoint-ment:

All the West European and American leaders were here, inRome, two weeks ago to discuss NATO. All of them withoutexception turned up; but they are not here today. I imagine it isbecause they do not consider that the problem of over 800people who are afflicted by hunger to be important.

The director general of the FAO, Jacques Diouf, stated:

How many OCDE heads of state and government have bo-thered to come to this summit of the poor? Only two, out of atotal of 29! That is an indicator of the priority attached to thetragedy of hunger.

It should be noted that the US delegation at the summit—with thetacit agreement of the EU—opposed including a reference to theexistence of "the right to food" in the final declaration. And also that

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none of the Western countries that engage in extraction of nonre-newable raw materials in Africa has yet ceased to exploit theseresources.

EMIGRATION TO SPAIN

The most prominent aspect of relations between Spain and Africa, andone that is both disturbing and involves exceptional effort with little toshow for it, is illegal immigration. Over the past year, Spain has been lite-rally swamped by a continuous flow of illegal immigrants from the Africancoasts who amazingly defy the hostility of the night, an element most areunfamiliar with—the sea—the tight surveillance of the Spanish security for-ces and adverse weather conditions in order to risk their lives in primitiveboats to reach the coast of Spain, which is the coast of Europe, where theyare subsequently easily spotted, unable to conceal their distinctive racialfeatures. They are obviously driven by necessity, fleeing from the direpoverty of their hometowns, but the toll of deaths from drowning and thelist of missing persons are impressive.

To make matters even worse, these poor people, who risk everythingto improve their own lives or those of the families they leave behind, haveto pay the criminal gangs who organise the smuggling of people dispro-portionate sums of money for these risky and unbearable crossings. Howthey manage to come up with the cash, which logically has to be paidcompulsory in advance, is very difficult to imagine. The price is equivalentto five or six months' wages from the exacting jobs that the few "luckyones" managed to secure later on, but in their countries of origin or tran-sit, which is where they have to earn the money needed to pay for thecrossing in the flimsy boats, it can take five or six years of effort and sacri-fice to save it up.

If, on top of this string of hardships, we consider that some have to tra-vel many kilometres, sometimes thousands, in the most precarious of con-ditions to reach the clandestine ports where they embark, the trials and tri-bulations of these poor people seem absolutely inhuman. However, asmentioned earlier, the number and frequency of these arrivals is normallydescribed as an avalanche.

Anyone, including the Spanish government, tends to pity these humanbeings who are driven by poverty and despair to endure such hardship;but this does not mean that immigrants should be allowed to enter freely

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and in an uncontrolled manner. Africa has 800 million inhabitants, possiblyover half of whom would like to live in Europe. Even if this were only trueof one-tenth of the population, it would be impossible to cope with suchan influx. It is essential to regulate immigration and control arrivals. TheSpanish government has designed and adopted a whole range of meas-ures to perform both tasks and to ensure the peaceful social integration ofimmigrants. It should be borne in mind that Spain not only has to deal withan inflow of African migrants but also an inflow of migrants from Spanish-speaking America, which is similar in size though very different, as well asEast Europeans, who have specific characteristics of their own but alsoaccount for a significant proportion of migrants.

Every year Spain establishes a quota of immigrants whom it can takein on the basis of existing jobs and available social facilities for easing inte-gration. The figure for 2002 was 32,000. In view of the existence of a con-siderable number of irregular immigrants, who were not subject to anycontrol or entitled to social assistance—some 350,000, 70 percent ofwhom are exploited by employers—in the past two years the governmenthas launched four special regularisation processes. As a result, 428,924foreign nationals managed to legalise their situation and obtain residencepermits and access to the labour market. A further 250,000 could not bedealt with and had no choice but to return to their countries of origin andreapply another year.

At the beginning of the year, the total number of foreign nationals withresidence permits amounted to 1,243,919, 3.11 percent of Spain's popu-lation. Of these, 323,705 are Africans, who account for 0.81 percent of thepopulation according to the census. Although in itself this figure is not alar-ming, we should note that it has grown in a very short time, that 102,595are unemployed, 250,000 are totally illegal and the rate of arrivals remainsvery high and has climbed by 34.72 percent this past year. Some 9,000pitch up in Madrid every month.

It is obvious that the issue of illegal immigration, with its tragic andregrettably frequent losses of human lives in the Strait of Gibraltar, whichcauses adverse reactions from people living near the pockets of illegalimmigrants and requires increasingly integrated efforts to control the mas-sive arrivals, would not exist without the criminal groups. This smugglingof people should not only be combated at the arrival points, but also in thecountries of origin, which should be offered, in exchange, as many jobs fortheir citizens as circumstances allow. For this purpose, the Spanish

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government has signed or is currently preparing treaties with Morocco,Algeria, Nigeria, Mauritania, Mali, Senegal, Côte d'Ivoire, Cape Verde,Angola and Ghana.

THE MONTERREY SUMMIT

The UN Forum on Financing for Development began in Monterrey(Mexico) on 18 March. It goes without saying that the meeting ended with-out any formal commitments of assistance, although there were noveltiesthat may mark a substantial change in criteria.

This conference—as is well known—was supposed to request a spe-cial financial contribution to enable poverty in the world to be halved by2015, but America, represented by President Bush, announced that itwanted to change the criteria for reaching a new agreement, and was sup-ported by the EU. Mr Bush stated that there will be no more money unlesschanges are made in the poor countries' political and economic structure:

For decades, the success of development aid was measuredonly in the resources spent, not the results achieved. Yet, pou-ring money into a failed status quo does little to help the poor,and can actually delay the progress of reform.

He specified that, in order to reduce poverty, trade needs to be deve-loped. He cited as an example South Korea, China and Chile, countrieswhich trade has helped "to replace despair with opportunities for millionsof their citizens". This proposal surprised many of those present but thefact is that, in the end, they all signed the "Monterrey consensus", exceptfor Fidel Castro of Cuba. As immediate backing for the new policy, the EUand the US promised two aid packages of $8 and $5.6 billion respecti-vely—substantial figures which nevertheless scarcely account for 20 per-cent of the annual requirement. The European countries also expressedtheir willingness to boost their contributions. During the 2001-2004 period,Spain will allocate $7 billion, over $1.7 annually; this amounts to roughly0.28 percent of GDP, and should be increased to 0.33 percent in 2006.

THE JOHANNESBURG SUMMIT

The World Summit on Sustainable Development or "Earth Summit"was held in Johannesburg at the end of August. It was the biggest confe-

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rence in the UN's history, as it was attended by over 1,500 ministers fromall over the world and some 100 heads of state and government. The USPresident did not attend. This time the EU showed notable interest in itsrepresentation and arguments. Two major issues were discussed: elimina-ting poverty and fighting against environmental deterioration, and it there-fore cannot be said that the EU's active participation was due to either.

The summit was intended to be a follow-up to the previous one (1992)held in Rio de Janeiro. The "Rio Summit" aroused great expectations andended with the conviction that the developed nations were seriously willingto help the poor countries fight poverty, but the resolutions adopted wereno more than good intentions that have never been put into practice.

On this occasion, the EU had prepared its addresses and proposalsdiligently, convinced of the need to make determined progress both in fin-ding an effective solution to the huge pockets of poverty in the world andin consolidating its leadership in the defence of nature and opposition tohuman-induced climate change, as stated in the "Kyoto Protocol". In thischapter we will only deal with the first of these goals, poverty, water, healthand farming, which are fully relevant to Africa's situation.

It was a key occasion for concluding specific agreements to enable theessential goal of what has been called the "Millennium Declaration" to beachieved: halving the number of people who live in dire poverty by 2015.The EU centres its greatest effort on the problem of water, given thatmillions of people die every year because they have no access to safedrinking water and one-third of the world's population lives in countrieswith insufficient water to meet their basic consumption and hygieneneeds. The aim was to have halved the number of people without water by2015, allocating to this goal the sum of $1.4 trillion, to be invested in 2003,and increased in the following years.

On this occasion, the African countries, and many others attending thesummit, did not waste the opportunity to express their disapproval ofAmerica's policy, which they regarded as showing little solidarity towardsmankind's great problems. The secretary of state, Colin Powell, who head-ed the US delegation, had to listen to loud protests when beginning hisaddress and some of the attendees even left the room. It was not just thatthe most powerful country in the world was addressing the representati-ves of 815 million hungry people; or that its president had chosen not toattend the "famine forum". On top of all this, the US policy of farm subsi-dies is seriously hampering the trade in Third World countries' agricultural

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produce and textiles, America did not wish to sign the Kyoto protocol, andis the nation that allocates the least to development assistance in terms ofeffort, a mere 0.11 percent of its GDP.

But America appeased its critics with money for the most needy andpresented five aid initiatives with financial backing: water distribution, with$970 million in three years; access to energy, with $43 million in 2003;combating famine in Africa, with $90 million in 2003; protecting the Congoforests, with $53 million in four years; and combating AIDS, tuberculosisand malaria, with $1.2 billion in 2003.

As usual, the expectations of the Johannesburg summit were scarcelymet—"very ambiguous results", as Kofi Annan put it. However, govern-ments and enterprises committed themselves to halving the number ofpeople without access to clean water by 2015.

NEW ORGANISATIONS IN AFRICA

— The African Union (AU). Officially established in Durban (SouthAfrica), on 9 July, in the presence of 40 heads of state or govern-ment and the UN Secretary-General. Mainly promoted by Libya'sMuammar Qaddafi, and based on the EU, this new multilateralorganisation has now begun its activity after a long period of nego-tiations and agreements and has replaced the old "Organisation forAfrican Unity" (OAU), whose 38th and last summit was held on thatday and in that city.

The OAU was established in 1963 as a pan-African organisation.The "fathers" of colonial emancipation pinned great hopes on it.However, it had been flagging to the point of becoming almosttotally inoperative and had turned its back on reality. To cite YoweriMuseveni, the president of Uganda, it had become a "union of dic-tators and criminals". The OAU never made an effort to promotefreedom and progress, or Africa's political and economic emanci-pation, the purpose for which it was set up. With the excuse of "notinterfering in domestic affairs", it failed to prevent or put an end toany of the many conflicts that have so often plagued the black con-tinent. Nor did it ever go any further than rhetoric in the wars of libe-ration that some countries waged on the colonial powers or defendfreedoms. Indeed, it was eventually made up of, and even presidedby, notorious dictators and perpetrators of genocide.

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The new AU aims to model itself on the EU, though no compulsoryexclusive requirements have been established as to the democracyof its members, without which it will never succeed in resemblingthe European organisation. What it has envisaged is a committeeto verify the degree of democracy and respect for human rights ofthe member states, but it has also established that membership ofthis committee is voluntary and only its members can be examined.Colonel Qaddafi has made a point of stating that he will not besupervised by anyone.

However, the nascent AU has already made some decisions of far-reaching importance. The first was to address the problem ofcorruption that seems to be costing the continent some $148billion every year. In September a project, under consideration for ayear, to invite all government officials to declare their assets whentaking up office and to ensure ethical conduct was approved inAddis Ababa (Ethiopia). It is to be ratified by the heads of state atthe forthcoming summit, which will take place in Maputo(Mozambique) in 2003.

Certainly, some leaders are seriously willing to solve the majorchronic problems of the African world, though there are also doubtsabout whether this is possible, bearing in mind the vices, methodsand arbitrary impositions that have characterised African gover-nance for many years. Kofi Annan has suggested that the Africanleaders should avoid complacency at all costs, reminding them ofthe vast size of the continent, its economic underdevelopment, itsdebts and legacy of wars, and inviting them to ratify the project fora parliament to provide the AU with a legislative body.

The newly established AU has been given a one-year transition andrunning-in period. The documents submitted speak of structuringand regulating the four principal organs: the conference of heads ofstate, the executive ministerial council, the commission and com-mittee of permanent representatives. It will also have its own par-liament, central bank, security council and peacekeeping force. Itwill be based on the New Partnership for African Development(NEPAD).

Morocco, one of the founders of the OAU, has refused to join theassociation if the Saharan Democratic Arab Republic belongs as anindependent nation.

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— New Partnership for African Development (NEPAD). This new part-nership, NEPAD, seems to have got off to a good start. Establishedin 2001 within the nascent AU on the initiative of several African lea-ders and encouraged by South Africa's President Mbeki, it is ins-pired by the US Marshall Plan for reconstructing Europe after theSecond World War. Its purpose is not to increase the humanitarianassistance these countries receive but to promote foreign invest-ment in the continent, at the same time helping to place Africanproducts on the world market. The four member states who leadthe initiative are South Africa, Algeria, Nigeria and Senegal.

The optimism inspired by its first steps springs from the fact that ithas been particularly well received by the main world organisations,perhaps because, for the first time, it constitutes an attempt to pro-mote new African markets instead of the usual requests for huma-nitarian assistance. On 25 March its leaders met at Abuja (Nigeria)to establish the NEPAD's priorities and adapt them to the interna-tional community's development programmes in order to subse-quently present them at the G-8 summit in Canada. Four prioritysectors were defined: agriculture and access to international mar-kets; infrastructure (water, transport, energy and information tech-nology); capital flows; and human development (health and educa-tion).

Between 15 and 16 April a conference on financing the NEPAD washeld in Dakar (Senegal), attended by 30 African leaders and repre-sentatives of international organisations and private companies, 50of them American. The World Bank expressed great interest, sup-porting the recent decisions taken at Monterrey. However, as itsestablishment and launch hinged on financing the plan, it was inJune, at the "Group of Eight" (G-8) summit in Canada, whenNEPAD achieved its first significant success. In view of theCanadian prime minister's appeal for solidarity and the UnitedStates' promises of support, the representatives of the eight richestcountries in the world recognised that they cannot continue to bepassive observers of the dire poverty in which millions of Africanslive and decided to back the NEPAD.

The G-8 leaders asked the four African heads of state attending theconference to prepare a plan to launch the partnership, warningthat their effort would be limited to African nations that opened their

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doors to foreign investment and, subsequently, upheld the princi-ples of good governance, with democratic systems and respect forhuman rights. They also made it clear that their contributions wouldbe supervised as closely as possible to prevent the squanderingand ineffectiveness witnessed in some cases in the past.

They agreed on a financing scheme establishing that half of theODA committed at Monterrey, $12 billion, would be allocated to the53 African countries as a whole. They also agreed on a supple-mentary effort of $1 billion to reduce these countries' foreign debtand progress towards fully cancelling that of the most heavilyindebted countries and those worst hit by the fall in the prices ofcommodities. The biggest contributions came from Japan andAmerica. This was only the beginning, but a very encouraging one.In mid-September the United Nations General Assembly devoted aspecial session to Africa and, specifically, to examining the NEPAD.

AFRICAN OIL

That there is oil in Africa is nothing new. What is new is the discoveryof oilfields (and the resulting negotiations over their exploitation), the plansfor an international oil pipeline and some quarrels over the delimitation ofunclear borderlines which had never given rise to any friction or recourseto international courts but have become possible sources of crises nowthat they have been found to contain oil. While these developments, inthemselves, would not warrant world attention, we should point out thechanges they have brought about in the strategic interests of some majorpowers, which seem determined to take up more advantageous positionsthat guarantee them supplies of these new energy sources.

The fact is that the new deposits are located around the Gulf of Guinea,which already produced a significant amount of oil, but now enjoys great-er importance than before as a strategic objective following the discoveryof the new oil traps. This interest is even greater bearing in mind that theMiddle East, hitherto a key source of supply to the West, is a politicallyunstable region in permanent conflict with increasingly demanding andchanging leaders, some of whom do not bother to conceal their growinganimosity towards the Western world and, more specifically, towards theUnited States. And the fact that Islamic terrorism seems to have estab-lished its headquarters there, without obvious protests from the neigh-

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bouring countries and with proclamations and categorical threats of har-ming the interests of America and its allies, makes the region even moreinaccessible and insecure. These negative circumstances do not apply toAfrican oil.

Estimated crude oil reserves in the Gulf of Guinea, as far as Angola, areas follows: Nigeria, 28 billion barrels; Angola, seven billion; Sao Tomé andPrincipe, four billion; Gabon, 2.5 billion; Congo-Brazzaville, 1.5 billion;Chad, which will soon begin to pump 200 thousand barrels daily along a1,070-km pipeline as far as the coast, via Cameroon, one billion; EquatorialGuinea, 500 million; and Cameroon, 400 million. That is, some 45 billionbarrels worth of identified and measured reserves, not to mention the oilthat is produced, in smaller quantities, in Côte d'Ivoire, DR Congo andBenin, all of which are in the same area.

Although this volume accounts roughly for only one-sixth of the 261billion barrels produced by Saudi Arabia, experts say that the potential forexpansion is very great. In six years Equatorial Guinea has gone from pro-ducing 17,000 to 300,000 barrels daily; new petroleum deposits have beenlocated in Mauritania since 2001, and in the Central African Republic; andMorocco recently granted permission for prospecting in the disputedwaters of Western Sahara.

Apart from its abundance, which looks set to increase, African oil hasother advantages: it is high-grade, has a low sulphur content, whichmakes it easier to refine, is concentrated around the Gulf of Guinea area,that is, by the open Atlantic Ocean and sea traffic does not have to navi-gate any straits or channels such as Suez, the Red Sea, Mandeb, Hormuzand Gibraltar in the Middle East region; and there are abundant offshoredrilling and production rigs, which make it easier to supervise, protectand control both the platforms themselves and the tankers that transportthe oil.

The oil companies Total-Fina-Elf, Royal Dutch Shell, Texaco, Agip andother smaller ones have been operating in the region for a long time, butthe new oil wells have been snapped up by the US giants Exxon Mobil andChevron and the independent Amerada Hess. The American firms havebeen particularly indulgent with the leaders of the new oil producing coun-tries, such as Equatorial Guinea. African oil, including that from the northof the continent, covers 15 percent of America's needs and this figure isexpected to reach 25 percent by 2015. Indeed, Africa is one of that mar-ket's fastest-growing sources of oil and gas.

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Apart from heavy pollution and irreparable damage to the environment,this significant oil production provides these impoverished African coun-tries with billions of dollars that ought be spent on areas so badly in needof assistance such as education, infrastructure and health, though in manycases this has not occurred. Nigeria has exported $320 billion worth of oilover the past 30 years, yet practically the only improvements in its infras-tructure are a few neglected highways and several sports centres. One ofits recent leaders, General Sani Abacha, who died in 1998, is believed tohave amassed a fortune of over $4 billion.

Angola is another case: an IMF report released in early October re-vealed that $4 billion had been siphoned off the state budget in the pastfive years. It is feared that the huge sums of money that are entering Africaare encouraging its dictators' greed.

COMMENT

We must remain hopeful that Africa will not always be a problem andwill overcome the precarious situation we are so familiar with. It is en-dowed with huge human resources and its raw materials are coveted bymany developed countries. Its population's youth—for over 50 percent ofBlack Africa's inhabitants are less than 20 years old—is an encouragingfactor. But, without help, Africa cannot build a better future. We must admitthat although some foreign efforts have proved useful, other operationshave contributed to disorganisation and corruption. Many Africans aredetermined to overcome the social and economic difficulties that are hold-ing back the continent's development. Education at all levels is undoub-tedly the key to Africa's future.

TWO WARS END (FOR THE TIME BEING) AND ONE BEGINS

Angola (1,246,700 sq km)

On 22 February, Jonas Savimbi, the legendary leader of the UNITAmovement (National Union for the Total Independence of Angola) diedin combat when fighting against the government forces. He had foughtfor 27 years against the MPLA (Popular Liberation Movement ofAngola) and its leader, the nation's President José Eduardo DosSantos.

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The MPLA had been a Marxist-oriented movement backed by theUSSR and Cuba. UNITA was formed to fight against Portuguese colonialrule and, once Angola was independent, gained the favour and support ofthe Western world, particularly America, in its fight against communism. Itis now many years since the support and favours ceased. In some cases,its friends changed sides, such as America, which is said to have done sowhen huge petroleum deposits were discovered in the territory controlledby Mr Dos Santos. But the devastating war continued, plunging thecountry into the cruellest suffering and poverty.

News of Mr Savimbi's death prompted the people to take to thestreets, dressed in festive white, in the government-controlled cities; butpeople throughout the nation hoped that peace could have arrived at last,and the flags of UNITA and the MPLA were seen together. On 12 MarchAntonio Dembo, Mr Savimbi's successor, also fell. The following day thegovernment ordered actions against UNITA to be called off and proposednegotiations, promising an amnesty if it laid down its weapons. The firstagreements were reached two days later. The ceasefire agreement wassigned on 31 March and immediately afterwards parliament passed anamnesty law for the rebels. Peace was proclaimed on 4 April.

So ended 27 years of cruel war and abundant use of materiel by bothsides; the MPLA financed theirs with oil sales and UNITA with the proceedsof the diamond trade. The irreconcilable positions, the immediate failure ofthe attempts at reaching a treaty owing to Mr Dos Santos's intransigence andthe accumulated hatred fuelled by the huge damages suffered by both sidesleft no other hope than the death of one of the leaders, as has occurred.

Following disarmament, the outcome is as follows: one million deadout of a population of 13 million inhabitants; four million people who hadfled and were displaced and are now returning to search for what remains,if anything, of their properties. A country that is devastated, razed to theground, sown with four or five million mines that are preventing the essen-tial crop cultivation and cause some 60 accidents daily, including deathsand injuries. Seventy-eight percent of the rural population lives in povertyand in most population centres the only means of existence is rummagingin trash. And thousands of starving people flock to the cities in the hopeof finding some means of subsistence; many die of starvation every day.Today Angola is at the bottom of the world ranking with respect to childsurvival rates—some 300 children per thousand live births die before rea-ching the age of five.

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The UN, the EU, NGOs and many other international organisationshave launched appeals for urgent relief. In September the World Bank pro-mised $120 million to help reconstruct the country. The WFP (World FoodProgramme) provided aid for 1.5 million Angolans in September and for21.8 million in October. Four million people require urgent daily assistance.In July the country urgently required $171 million for its most pressingneeds. In May the EU began to deliver 125 million worth of aid and theNGOs launched a programme to vaccinate 172,000 children.

Special mention should be made of the demobilised UNITA troops,some 55,000 combatants. According to the Lusaka Protocol establishingthe peace conditions, some 5,000 UNITA soldiers and commanders mustbe integrated into the national army. It is essential to reintegrate the re-maining 50,000 into society promptly.

For this purpose, the government has set up a "special service fornational reconstruction", one of the priorities of which is to provide accom-modation for the UNITA combatants and their families. Logically, it alsofocuses on solving the problems of the war victims, procurement of provi-sions and agricultural tools and rebuilding infrastructure, particularly hos-pitals. Today UNITA is merely an enfeebled political party bereft of support.

At the same time, it taking care not to neglect the enclave of Cabinda—located between Congo Brazzaville and the DR Congo—which possessesconsiderable petroleum resources and has been struggling for indepen-dence for several years. The UN has also set up a joint commission to sup-port and supervise the peace process, and to ensure it is compatible withmeasures to remedy the critical humanitarian situation.

Angola is now much poorer than when it gained its independence.Twenty-seven years of war have plunged it into a state of dire poverty. Butit has also endured 23 years of incompetent and corrupt government.Despite this nation's vast oil, gold and diamond resources, the Bank ofAngola has neither gold nor currency reserves. Inflation is running ataround 325 percent, its GDP per capita at the current exchange ratestands at some $700 and much of its population subsists on internationalrelief. The massive proceeds of oil sales seem to have gone mostly tofinancing the war and to private bank accounts.

With the attention of the world organisations focused on Angola andwith elections around the corner, we are now hearing proclamations ofgood governance. Certainly, the end of the war has put paid to the excu-

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ses of purchases of materiel that enabled fortunes to be amassed. IfAngola eventually has a clean and transparent government, investigationsof the immediate past may give Jonas Savimbi the victory he failed toachieve in his lifetime.

Democratic Republic of the Congo (DR Congo)

As is well known, following the murder of Laurent Desiré Kabila, on 17January 2001, his son Joseph Kabila was appointed his successor. Thenew president began his mandate by meeting the heads of state of thethree nations that had sponsored the ceasefire agreements of Lusaka in1999 (the USA, France and Belgium) and the UN Secretary-General. Heinformed them all of his intention to establish peace in the DR Congo andpointed out that the main stumbling block was the presence of foreigntroops from six nations and asked for help in ensuring their withdrawal,particularly those of Uganda and Rwanda, which were fighting against hisgovernment with 30,000 soldiers.

Since then the tensions, clashes and killings have not ceased. JosephKabila has been subjected to all kinds of pressure. His government hasbeen characterised by instability and inability to put a stop to all theseoutrages. One of the essential conditions for restoring peace was to esta-blish a dialogue between all the parties to the conflict and the civilianpopulation, attempting to reach agreements that made co-existence pos-sible, the so-called "inter-Congolese dialogue". Mr Kabila has attemptedto bring about these meetings, which have resulted in all kinds of inte-rruptions, cancellations and rebuffs.

The UN has either not hit upon the means or not managed to promotepeace in a clear, determined and resolute manner. It is hard to justify itspassivity. Taking action would not even have amounted to interfering indomestic matters since, first, there were plenty of humanitarian reasonsfor stepping in; second, an invasion by force of a sovereign nation hadoccurred (Uganda and Rwanda); and lastly, the president of the nation hadasked the UN for help.

Even in 2001, the UN Security Council had merely called on the manyclashing rebel groups to withdraw their troops and asked Uganda andRwanda to pull back 15 km from the line of fire, which eventually, afterconsiderable delay, occurred in May that year. These movements werescarcely relevant to the true reasons for their presence in the DR Congo,

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namely continuing to plunder its resources. Even Angola and Zimbabwe,which were theoretically on the Kinshasa government's side, have beenreluctant to abandon their positions for the same unmentionable reasonsas Uganda and Rwanda since Laurent D. Kabila appealed for their help.

At the beginning of this year, 2002, which got off to a bad start with theeruption of the Nyiaragongo volcano that destroyed 80 percent of the townof Goma by the border with Uganda, the sad situation of suffering, mas-sacre and disregard for people's fundamental rights continued, while theinternational community failed to act and with the complicity of some self-interested Western countries that benefited from what was occurringthere. Eventually, Uganda announced the withdrawal of 10,000 of its men,but Paul Kagame of Rwanda maintained his prolonged presence onCongolese territory, blatantly rejecting international demands and conti-nuing his predatory activities.

The atrocities committed by Rwandan forces in May in the Kisanganiarea once again rocked the world. The Kinshasa government filed a com-plaint with the International Court of Justice (ICJ) of The Hague, asking it tofind the invader nation guilty of genocide against 3.5 million Congolese andto order Rwanda to withdraw immediately from its territories. However,Kigali (Rwanda) has never recognised the ICJ and two weeks later the courtdeclared it was not competent to hear the case and abstained from or-dering any measures to be taken. The UN asked for a humanitarian aid corri-dor to be established in the area and in July the leaders of DR Congo andRwanda met Kofi Annan in South Africa to attempt to reach an agreement.

These outrages were accompanied on occasions by actions directedat UN officials, who were expelled from the territory, including theSecretary-General's special envoy for humanitarian affairs, who wasdeclared a "persona non grata" and accused of conniving with theKinshasa authorities. The Security Council merely asked for an end to theharassment of its officials.

Meanwhile, the peace process agreed in Lusaka (Zambia) struggled tostay alive, though falteringly, admirably encouraged by South Africa, whichhad also promoted the aforementioned agreement. Apart from demandingan immediate cessation of hostilities, the disarmament of the opponentsand the logical withdrawal of all the foreign forces from Congolese terri-tory—blatantly ignored for 21 months—it envisaged the essential "inter-Congolese dialogue" between the leaders of all the groups involved in theconflicts and representatives of civil institutions.

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In January this year, Belgium, the former colonial power which is lar-gely responsible for many of the events in its subsequent history, organ-ised a round table in Brussels with the political parties, Congolese civilsociety and non-belligerents. It was attended by 85 representatives anddelegates from the UN, the OAU and the EU. The participants reached afull consensus on the elections to be held, interim institutions, the futureconstitution and the national army.

On 25 February the inter-Congolese dialogue began in Sun City (SouthAfrica) after huge difficulties, objections and demands. Two days later, thetalks were broken off and resumed the following day. It was consideredunacceptable to continue with the dialogue while the violent quarrels per-sisted, and the Ugandan and Rwandan officials were asked to leave theroom. At last, on 6 March, political dialogue was initiated in a plenary ses-sion attended by 360 participants and observers from the UN, OAU, SouthAfrica and Zambia. Aside from the many difficulties and quarrels, the stum-bling blocks to the process are basically the transition government and thenew army, particularly because everyone wants the top posts.

The majority proposal, which was internationally supported, was thatJoseph Kabila should preside over the transition, and the thousand or soother clauses and details negotiated at last met with the approval ofUganda and its supporters in July, in Pretoria, and—this is the real triumphof the process—also of Rwanda and it is supporters subsequently. Soended eight hard weeks of negotiations and controversy. On 30 July thepresidents of the DR Congo and Rwanda shook hands, officially conclu-ding the agreement to withdraw troops within 90 days.

Having achieved this major basic and essential step, the next stagewas to progress immediately to putting what had been agreed into prac-tice, though it was soon realised that implementation poses difficulties.None of the agreements, not even the initial Osaka Protocol, establishesdevelopment clauses, even though certain questions of maximum impor-tance cannot be improvised, such as the demobilisation of forces andwithdrawal of foreign troops. The UN contingent is not capable of control-ling the process, nor does it have the authority to oblige them to disarm,and nor does the small, badly organised Congolese Army.

Another extremely serious question is the emergence of a dangerouspower vacuum in the areas from which the Ugandan and Rwandan armiesare pulling out. There are no troops to control this huge area plagued withguerrilla fighters and inundated with weapons and desires for vengeance.

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In September the UN Secretary-General proposed building up theMONUC contingent to 8,700, though this is still clearly insufficient; inSierra Leone, which is 30 times smaller, the UNAMSIL had 18,000 men atits disposal to perform a similar task. Fear of the eruption of anarchy andviolence led the UN to ask Uganda to keep a force in the DR Congo.

At last the foreign troops and military bases were dismantled between28 August, starting with Zimbabwe, and 5 October, when Rwanda and theUN announced the end of foreign military presence in the DR Congo.Troops from Angola, Zimbabwe, Burundi, Uganda and Rwanda have with-drawn and the Mayi-Mayi, Hema and Lendu guerrilla fighters have alsopulled out. The Congolese people, after four years of torment, watched thecaravans of troops, heavy artillery, armoured tanks, helicopters and hun-dreds of vehicles disappear with a mixture of satisfaction and a certainamount of fear. On 29 October, the new national unity government set towork. The peace process, extremely fragile and beset with problems, gotoff to a slow start, surrounded by threats and the indifference of the inter-national community.

Côte d'Ivoire

The situation was relatively calm at the beginning of the year (2002). A"Forum for National Reconciliation" was mediating between the sides. Theeconomic situation had improved, some aid was received fromInternational organisations and the "Paris Club" cancelled $911 million ofthe country's debt and staggered the pending payments. It is assumedthat this external support was designed to defuse the existing tension.Four of the main players even met: President Gbagbo, Mr Outtara, GeneralGueï and the overthrown president Bedie, which seemed to help iron outsome of the differences. But none of this was sufficient to bring about fullreconciliation.

During the regional elections in July, political differences again sur-faced, leading to more radical stances, though the peace was not broken.But September saw the emergence of bloody clashes: on the 19th, whilethe president was on an official trip to Italy, 750 military staged an uprisingin which General Gueï, the minister of the interior and 80 people were killedin the economic capital, Abidjan, and 150 were wounded. The rebels weresubdued in the capital but managed to take Bouaké, the country's secondlargest city. The prime minister hastily declared that the attempt had failed,

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and President Gbagbo continued his Italian visit. The government heldGeneral Gueï responsible for the coup.

But the rebellion had not been quashed. The rebels held on to Bouakéand also took Korhogo, in the north, the domain of Alassane Outtara, whoby then had taken refuge in the French embassy in Abidjan. The govern-ment began to speak of an "external aggression" and "war of occupation",implying, without actually saying so, that Burkina Faso was behind it.Fearing for its compatriots, France announced it was sending more troops,70 paratroopers, to reinforce the contingent of 600 men already deployedto Côte d'Ivoire, but explained that it did not wish to participate in therevolt in any way. By then the death toll had risen to 270 and 300 peoplehad been wounded; the disturbances were growing and hundreds of dwel-lings were burned down, including that of the main opposition leader, MrOuttara.

On 27 September, eight days after the coup, President Gbagbo re-turned to the nation, which he found split into two—a loyal south and 40percent of the territory in the north in the hands of the rebels. BurkinaFaso, in the north, closed its borders to prevent being drawn into the dis-turbances, though its nationals living in Côte d'Ivoire were suffering repri-sals. The fact is that Abidjan held it responsible for encouraging the inci-dents. Burkina's President Campoaré denied any involvement and statedhe would assume his responsibilities if the Côte d'Ivoire authorities gua-ranteed his subjects' safety, but his embassy was assaulted, as were thehouses and shops belonging to Burkinan citizens, 200,000 of whom fledfrom the city. Widespread destruction and looting occurred. The US or-dered its citizens to abandon the country.

Nigeria, Ghana and Togo pledged their support for the Côte d'Ivoiregovernment, as did the ECOWAS (Economic Community of West AfricanStates), which offered to mediate between the parties and send a peace-keeping force. At the end of September the CEDEAO, assisted by French,American and British officials, met the commanders of the Côte d'Ivoirearmy and the rebels to mediate between them and propose the deploy-ment of a peacemaking force to ensure a ceasefire. But President Gbagbohad other ideas and remained determined to quash the uprising. He de-clared the areas occupied by the rebels to be war zones and ordered hisarmy to launch a counteroffensive to win back Bouaké; this effort hadfailed within two days. South Africa sent 200 mercenaries to protect thepresident and Angola also sent men and two armoured tanks.

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At the beginning of October the two sides met in Lomé (Togo), butproved to be intransigent. Neither the rebels nor the government werewilling to cede. There is a risk of religious implications as the president hasalways been intolerant towards Islamic tendencies and the Muslims imme-diately sided with the rebels. What seems certain is that this conflict willseriously damage Côte d'Ivoire's fragile economy and cacao crops, ofwhich it is the world's leading producer.

EQUATORIAL GUINEA

Spain's former colony in Africa. According to 2000 data, its GDP hadgrown at an impressive 48.2 percent in five years since its oil productioninstallations came into service. However, 75 percent of the population livesin poverty and corruption seems to be soaring. According to the WorldBank, a mere five percent of the population has benefited from the hugeincrease in revenue in past years.

The country's President Teodoro Obiang Nguema, in power since1979, has blocked all reforms designed to liberalise the regime and thereare many reports of human rights violations. According to the AmericanNGO Freedom House, Equatorial Guinea ranks fourth among the elevencountries with the fewest freedoms in the world. But its extraordinarily richoil resources have led some of the major powers that exploit them, suchas the US, to take an indulgent attitude. As for Spain, after years of chillyrelations and unfriendly attitudes on the part of the Ecuadorian president,it renewed its tentative contacts in 2001.

News broke out on 14 March that the Guinean authorities had arrested144 people for attempting a coup d'état. President Obiang Nguema hasalways been surrounded by his Praetorian guard, in addition to estab-lishing a police regime and web of informers that extends to all corners,however seemingly confidential. Given these circumstances the informa-tion, published by the interior minister to justify these arrests, that thegovernment in recent days has been enduring provocations and acts ofviolence committed by the radical opposition is hard to believe, as it ispractically impossible for such a large dissident movement to have beenformed without their initial contacts and commitments being detected bythe dense intelligence network.

The many arrests, including recently dismissed high-ranking politiciansand military, was followed by total silence from the government, which was

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accused of carrying out "a wave of arrests without court orders". At theend of March, Amnisty International pointed out that the detainees werebeing held incommunicado and in danger of being tortured and executed,though the government spokesman denied these claims.

The trial began on 23 May, attended by a Spanish delegation of obser-vers. The prosecution asked for the death penalty or 30 years' imprison-ment for eight people for attempting to assassinate the president of thenation and staging a coup. The defence lawyers complained of seriousirregularities. In the end 68 people were sentenced to between six andtwenty years' imprisonment and 76 were acquitted.

On another note, in April Equatorial Guinea and Cuba signed a co-ope-ration project to build the first food factory in Malaba the following month.Also in April the UN Human Rights Commission recalled its representativein Equatorial Guinea in view of the Malabo government's scant co-opera-tion and encouraged Obiang Nguema's executive to launch a nationalaction plan on human rights with the technical assistance of the HighCommission.

As regards social development, mention should be made of themarked and humiliating differences witnessed in the capital, Malabo, be-tween the 50,000 locals and the wealthy sector consisting of some 500people who have settled there since the discovery of oil. In the former onefinds unpaved streets, uncovered drains, jerry-built houses with zinc roofs,no refuse collection service or public transport, little street lighting andobvious poverty. The other area has luxury houses, hotels and cars andlarge green spaces with entrance restrictions. The only Guineans allowedin are tradesmen, household employees, cleaners, hotel workers and gar-deners.

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CHAPTER SEVEN

ASIA

ASIA

By Fernando Delage Carretero

INTRODUCTION

Tension between India and Pakistan, Islamist terrorism in Indonesia andthe Philippines, signs of economic reform and the recognition of North Korea’snuclear programme, and a new Chinese leader are the main points of interestin Asian security in 2002. They all reflect the twofold transformation—bothinternal and regional—the continent is undergoing. Different national pro-grammes for political and economic transition are being implemented acrossAsia, with undeniable implications for peace and security in the region.Furthermore, the past 12 months have witnessed a certain readjustment in thebalance between the major powers as a result of the emergence of China andIndia, the lengthy Japanese crisis and Russia's overtures to the United States.

Regional security has grown more fluid and complex, yet the mainthreats to peace have not disappeared: in June there was a certain risk ofarmed conflict in Kashmir, while tension continues in the Taiwan Strait andon the Korean peninsula. To this must be added the instability of Pakistanand Indonesia, worsened by the rising popularity of the Islamist parties inthe polls in the first case, and by the terrorist attack in Bali in the second.Nonetheless, the year witnessed renewed interest in finding a collectivesolution to security problems. Concern about China's growing power,Beijing's keenness to earn its neighbours' confidence, Pyongyang'surgent wish to open up a diplomatic channel and America's need for part-ners in the war on terror have had the effect of consolidating the RegionalForum of the Association of South-East Asian Nations (ARF), the only mul-tilateral organisation in this field.

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Practically all the Asian countries joined in the United States' condem-nation of terrorism, though the whole region is concerned aboutWashington's policy. Although more discreetly than their European coun-terparts, the United States' Asian allies—particularly Japan and SouthKorea—have expressed their doubts about its unilateralism, North Koreanstrategy and alarmism about China, while seeking greater autonomy oftheir own. The paradox that Washington seems to be keeping its relationswith Beijing in check while growing apart from its allies is striking, as thisis precisely the opposite of what President Bush intended when he tookup office.

The Republican team hoped to establish a new balance in Asia by at-taching less priority to China than the Clinton administration did in itsforeign policy. Mr Bush aimed to bolster his relations with Japan and SouthKorea and, following 11 September, also with India and the Association ofSouth-East Asian Nations (ASEAN). During the 2000 election campaign,Mr Bush continually referred to China as a "strategic competitor", thoughhe has never used this term since becoming president. Yet theQuadrennial Defense Review Report adopted on 30 September 2001expressed the same idea: it pointed out the possibility that "a military com-petitor with a formidable resource base" may emerge in Asia and statedthat the East Asian coastline—from the Bay of Bengal to the Sea ofJapan—represents a particular challenge. The events of 11 Septembermay explain why tension between Beijing and Washington has eased (wewill deal with this later on), though America still perceives China's emer-gence as a risk, as other documents showed throughout the year.

The war on terrorism and the supposed ties between the radical South-East Asian groups and al-Qaeda—confirmed after the attack on theIndonesian island of Bali on 12 October, attributed to the JemaahIslamiyah—have reinforced US security relations with the region. From thetroops it sent to the Philippines in January to joint intelligence withSingapore and Malaysia and the resumption of relations with theIndonesian armed forces, Washington currently enjoys a military co-ope-ration that had not been witnessed since the end of the Cold War.Following years of oblivion, South-East Asia has become a new strategicpriority for the United States, though there are risks that the region willgrow more unstable in the future. As one of Thailand's former foreignministers, Surin Pitsuwan, has pointed out, the "commitments" springingfrom this strategy could signify a step backwards for democratisation andthe advancement of human rights in Asia.

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Irrespective of the impact of 11 September and the evolution of USpolicy, the major forces that operate in Asia continued to follow theircourse. The following points should be taken into account when analysingthe events of the past year:

— Internal political instability. The main requisite for peace and secu-rity in Asia is political stability, which is uncertain in several coun-tries in the region. In North-East Asia, China faces the biggestchange in its leadership since the establishment of the People'sRepublic in 1949; Japan remains immersed in its political and eco-nomic crisis, though Prime Minister Junichiro Koizumi enjoys con-siderable popular support; and in South Korea the December elec-tions put an end to the second and last term of President Kim DaeJung and, probably, to his strategy of rapprochement with theNorth (known as the "sunshine policy"). If confirmed, the signs thatNorth Korea is opening up would be one of the highlights of theyear, though more for their diplomatic consequences than the like-lihood of immediate political reform.

As regards domestic-policy issues, the biggest problem inSouth-East Asia is Indonesia, whose economic recovery seemsto have come to a standstill. Violence continues to be rife andnot only the country's fragile democracy but also its territorialintegrity are at stake. The confirmation, with the Bali attack, ofthe existence of terrorist groups raises serious questions aboutthe governance of the archipelago and President MegawatiSukarnoputri's ability to face the challenges. The country's size,population, geographic location and resources make Indonesianinstability the region's main medium-term security hazard. ThePhilippines and Thailand are still struggling to overcome theweakness of their democratic institutions, while Malaysia isabout to enter a new era following the announcement in June ofthe retirement of Prime Minister Mahathir Mohamad in 2003 after20 years in power. And in South Asia, Pakistan's internal situa-tion is another of the biggest risks to regional security, as we willexamine later on.

— Economic uncertainty. Many Asian regimes—especially China andthe South-East Asian countries—have made their legitimacydependent on economic growth, and this is therefore a key elementof political stability. The World Bank forecasts for the People's

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Republic of China are GDP growth of 7.4 percent in 2001 (com-pared to 7.5 percent in 2003). However, despite this extraordinaryfigure, it has yet to correct serious structural problems, such as baddebts (which probably account for over 35 percent of GDP), thetechnical bankruptcy of over half the state companies, lower taxrevenues (17 percent of GDP in 2001) and insufficient job creation(eight million jobs per year as opposed to the necessary 20 or so).The transition to a proper market economy has yet to be comple-ted and the implementation of the commitments springing from itsmembership of the World Trade Organisation (WTO) could triggersocial problems.

In the South-East Asian countries, the Asian Development Bankestimates that GDP will grow by an average of 3.8 percent in 2002(4.6 percent in 2003), driven particularly by consumption and anupsurge in exports. However, investments have still to recoversince the financial crisis of the late nineties. The biggest concernsare the health of the US economy, given the region's dependenceon its exports to that market; the fiscal deficit, which is alarminglyhigh in countries such as the Philippines; and the bad loans that arestrangling almost all the area's economies.

Japan remains bogged down in a recession, though so far this hasnot affected its political stability or regional security (though it mayinfluence the world financial system in the medium term). SouthKorea has surprised the world with its economic performance—thegrowth forecast is six percent in 2002 (5.8% in 2003)—in additionto completing a proper structural transformation of its economy.And finally, India and Pakistan will grow by four and 3.6 percentrespectively in 2002. These are respectable figures but insufficient,bearing in mind that 300 million Indians and 56 million Pakistanislive on less than one dollar a day.

— Military modernisation and proliferation. Regional defence expendi-ture does not show any signs of being trimmed. Two of the sixcountries with the biggest defence budgets in the world are locatedin Asia—Japan and China—while defence spending in China andIndia have been increasing at a much higher rate than economicgrowth for several years now. But the most immediate concern re-lates to the proliferation of missiles and weapons of mass destruc-tion, particularly since in October North Korea recognised that,

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contrary to the Geneva agreement of 1994, it did not abandon itsnuclear weapons programme, which has been developed with theaid of Pakistan. According to Beijing, Pyongyang could have four orfive nuclear bombs, while the Pentagon reckons that North Koreahas over 100 Rodong missiles (with a range of some 1,600 km).China, for its part, continues to deploy more missiles to the TaiwanStrait (over 300 so far) and, like North Korea, is developing inter-continental rockets.

— Burgeoning regionalism. The experience of the financial crisis of1997-1998, excessive dependence of exports on the US marketand the need for self-defence mechanisms in the current era of glo-balisation have given impetus to Asian regionalism. While negotia-tions are being conducted on the enlargement of the EuropeanUnion and the establishment of the Free Trade Area of theAmericas, the Asian countries believe it is necessary to create theirown continental bloc in order to increase their weight in multilateraltrade negotiations. At the same time, growing rivalry between Chinaand Japan for influence in the region is also driving both countriescloser to the ASEAN, bringing North-East and South-East Asiatogether in new regional partnerships.

The annual ASEAN and ASEAN+3 summit (the 10 ASEAN membersplus China, Japan and South Korea), held in Cambodia's capital,Phnom Penh, in November confirmed these developments. China'sproposal to set up a free-trade area with ASEAN in ten years' timewas formalised. This will be the biggest of its kind in the world andwill expand the ASEAN's own Free Trade Area (AFTA), which waspromoted again in January despite the huge economic differenceswithin the organisation. Japan found itself obliged to counterBeijing's initiative with the proposal of an economic associationwith ASEAN, which Mr Koizumi presented in January on his visit toSingapore, the country with which Tokyo signed its first ever free-trade agreement.

Despite the greater economic integration that has resulted fromtrade flows and investments in the region, the political and diplo-matic implications should not be ignored. To the aforementionedconsolidation of the ARF should be added Beijing's growing multi-lateral activism and the progressive strategic convergence of theregional security interests of China, Japan and South Korea.

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NORTH-EAST ASIA

China

China's accession to the WTO at the end of 2001, the effects of this onthe country's economic reform policy and the access to power of a newgeneration following the 16th Congress of the Chinese Communist Party(CCP) in November 2002 marked a period of transition during which itsleaders' attention was focused on internal affairs. But China's economycontinues to grow, just as its military modernisation has not ceased to pro-gress. East Asia as a whole and the United States take for granted in theirstrategic calculations that a new superpower has emerged, even if theyhave not yet managed to fathom its intentions. In the past year at least,Chinese foreign policy has displayed considerable pragmatism and mode-ration, as evidenced in China's relations with Washington, defence of themultilateral processes under way and relations with Japan, South Koreaand the ASEAN. The priority of growth and today's economic interdepen-dence no doubt make any other alternative unadvisable.

Following the 16th Communist Party Congress, Jiang Zemin handedover his post as the party's secretary general to Hu Jintao (who will alsotake over from him as president of the Republic in March 2003) and newpeople were appointed to the main party organs, including the StandingCommittee of the Political Bureau, whose membership has increased fromseven to nine, reflecting the shift to collective management as opposed tothe personal leadership of previous periods. The Congress began on 8November—despite being scheduled for September—after weeks of spe-culation about Mr Jiang's supposed intentions to remain in power. It wasconfirmed that Mr Jiang will continue to chair the Central MilitaryCommittee (the same position Deng Xiaoping held for two years after step-ping down from the Standing Committee) and will retain very considerableinfluence, as he has placed as many as five of his loyal supporters inCommittee posts. One of them is Zeng Qinghong, who is to be watchedin coming years and will be responsible for foreign-policy and securitymatters. Mr Jiang's successor as party leader, 59-year-old Hu Jintao, is adark horse who nevertheless fits the profile of the classic Chinese leaders.He visited several European countries in autumn 2001 and paid a trip tothe United States from 27 April to 3 May 2002.

In addition to renewing its leadership, the Congress espoused a newideological platform to adapt its official doctrine to the changes China's

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society and economy are undergoing. Mr Jiang succeeded in having histheory of the "three representations" officially adopted and it will becomea third doctrine or pillar of Chinese communism, together with the thoughtof Mao and the theory of Deng. According to his principles, the party mustrepresent the interests of the middle classes and employers, as well asthose of the proletariat, its traditional support base.

The busy agenda for internal affairs has taken priority over diplomacy,which has nonetheless made an effort to convey an image of moderation.In particular, China has maintained good relations with the United Statessince 11 September. Beijing voted in favour of the Security Council reso-lutions against terrorism, sent a delegation of counterterrorism experts toWashington, reinforced security measures at its border with Afghanistanand froze bank deposits linked to extremist organisations. But it is unde-niably in China's interests to maintain this co-operative attitude: Beijingwants to appear a responsible member of the international community,shares with the United States a concern about the stability of Central andSouth Asia—particularly in relation to Pakistan, which developed its nucle-ar programme with Chinese help—and has its own problem of terrorism inthe Xinjiang region (According to the deputy premier, Qian Qichen, some1,000 Chinese Muslims were trained by al-Qaeda in Afghanistan).

However China's reaction does not conceal its underlying perceptions.Beijing cannot fail to be concerned to see that the United States hasstrengthened its alliance with Japan, developed a closer relationship withIndia, renewed its defence relations in South-East Asia and establishedbases in Central Asia. The changing relationship between the UnitedStates and Russia also poses a challenge to Chinese foreign policy. Beijinggradually shaped a strategy of rapprochement with the Central Asian repu-blics and Moscow, both of which are vital to its diplomatic and energyneeds. This is well illustrated by the institutionalisation of the ShanghaiCorporation Organisation in June 2001 and the treaty of friendship and co-operation signed with Russia the following month. China sought a meansof countering the United States' power and curtailing its influence in theregion. Following the Russian-US nuclear agreement of 24 May 2002, theintended "strategic partnership" between Beijing and Moscow lost all itscredibility. But far from seeing itself subject to an isolation policy, Chinahas actively engaged in Asian diplomacy and this has helped improve itsrelations with South Korea, Japan and, particularly, the ASEAN. The afore-mentioned agreement between Beijing and the 10 members of ASEAN tobuild what will be the biggest free-trade area in the world in 10 years' time

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is part of a sophisticated Chinese strategy that will also have considerablepositive effects for regional security.

In a year of political transition, Beijing has aimed to ensure that theUnited States does not consider it a potential adversary. The war on terro-rism provided both with a common goal on which to build closer co-ope-ration, but, as Mr Bush's visit to Beijing (21 to 22 February) proved, reluc-tance to establish a proper strategic dialogue has not been overcome.Indeed, two studies published in Washington in summer again underlinedthe fact that China represents a challenge to the United States. The first ofthese, a report from the Pentagon to Congress released on 12 July, statedthat the People's Republic is rapidly modernising its armed forces in orderto counter US power in the Pacific and pressure Taiwan into agreeing toreunification. The second, dated three days later, is a report by aCongress-appointed commission, the US-China Security ReviewCommission, which suggested adopting measures to stall Beijing's strate-gic and economic progress.

The conclusions of the Pentagon report, the Bush administration's firstanalysis of China's Armed Forces, do not differ greatly from those reachedduring the Clinton era, although they describe Beijing's ambitions and theirpotential threat more aggressively. The report reckons that the People'sRepublic spends some $65 million annually on modernising its army (theofficial figures announced in March are $20 million) and states that it isreinforcing its ballistic arsenal. According to the report, China is replacingits 20 DF-5 intercontinental missiles, which can reach the western part ofthe United States, with an even longer-range version, and adding some 50short-range missiles every year to an arsenal that already surpasses 350units, mostly deployed in the province of Fujian facing the Taiwan Strait.

As opposed to what would have happened in previous periods,China's official complaints about these reports went unnoticed. Thisshows the extent to which the circumstances of 11 September have trans-formed the atmosphere of bilateral relations. Whereas China had beenobsessed with the idea of a unipolar world and American hegemony sincethe end of the Cold War, it is now aware of its financial and technologicalinability to compete strategically with the United States. Furthermore, inorder to ensure its internal stability, it must continue to grow, and this inturn requires close trade relations with America. Washington, for its part,needs China as an ally in its campaign against terrorism, to get theSecurity Council to adopt a resolution against Iraq and to settle the crisis

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triggered by Pyongyang in October when it recognised its nuclear wea-pons programme.

These converging interests were reflected in Jiang Zemin's visit toGeorge W. Bush's ranch in Crawford, Texas, on 25 October, and days laterat the Asia-Pacific Economic Co-operation (APEC) summit in Los Cabos,Mexico. However, in the long term, the development of their relations willcontinue to be marked by deep mutual distrust. The United States seemsprepared to co-operate with China, but wants to be the dominant militarypower. And Beijing shows no intention of challenging America's militarypresence in Asia, but will continue to seek greater political and economicinfluence by fostering the establishment of a regional security system thatcould weaken Washington's web of bilateral agreements.

Taiwan

The climate of détente in Chinese-US relations is also reflected in theproblem of Taiwan. The United States has not modified the 2001 agree-ment on the sale of weapons, though there are certain doubts as to whatsystems it will supply in the end. The Taiwanese defence minister visitedFlorida in March (the highest level visit since 1979, though it was not offi-cial) and Congress even designated Taiwan a "non-NATO ally" inSeptember, despite the absence of formal bilateral relations. High-rankingofficials from the Pentagon, including the deputy defence secretary, PaulWolfowitz, publicly renewed the commitment announced by PresidentBush in April 2001 to protect the island, "whatever it takes", and ex-pressed their concern about Chinese military reinforcement along theStrait. Beijing's reaction was scarcely heard.

Tension mounted again on 3 August, when Taiwan's president, ChenShui-bian, made his most provocative declarations since coming to powerin May 2000 in a video-conference address to group of sympathisers ("theWorld Association of Taiwanese Associations") in Tokyo. Mr Chen statedthat Taiwan and China are both "a country either side of the Strait" andpointed out that Taiwan's future ought to be decided in a referendum—the"red line" he had promised not to cross. China immediately stated thatsuch a referendum would lead to disaster, though the controversy dieddown within a few days.

Mr Chen's declarations should probably be interpreted from the pointof view of domestic affairs. His goodwill gestures towards Beijing—the

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promises that Taipei would not declare independence, hold a referendumor refer to the former President Lee Teng-hui's definition of relations be-tween both sides of the Strait as "state-to-state" relations, while limits oninvestments in the continent have been abolished—have benefited thePeople's Republic though China failed to offer anything in exchange.Perhaps Mr Chen wished to recover part of the popular support he haslost with a message of firmness.

Japan

In April Junichiro Koizumi completed his first year as prime minister,though his reformist programme has failed to make the slightest progress.His latest plan to lick the financial system into shape was presented inOctober (bad loans amounted to a massive $45 billion at the close of thefiscal year in March), and again put on ice by the government due toopposition from the Liberal Democratic Party and various interest groups.Japan's immobilism explains its greater activism abroad, the most pro-minent example of which was by Mr Koizumi's visit to Pyongyang on 17September, although what is obliging Japan to adopt a more independentinternational position is the new Asian strategic balance. Whereas up untilthe end of the nineties its foreign policy was basically determined by itseconomic interests and alliance with the United States, it is now shapedby the changes in the regional security landscape, particularly as a resultof China's growing influence and the threat North Korea poses to itssecurity.

The Japanese leaders need to give a new direction to the foreign policythey have pursued since the end of the Cold War, but are not sure whatdirection that should be. Does the alliance with United States define theirstrategy as a whole? Should the country be more Asian oriented? It is suf-ficient to have a discourse based on the United Nations, multilateralism oreconomic regionalism? The economic and strategic circumstances of thenineties have put further pressure on Japan to clarify its international posi-tion and objectives in order to maintain its influence in a period characte-rised by loss of relative power. The past year showed signs of reneweddebate on these issues and the pursuit of greater autonomy in three areas:boosting the role of the self-defence forces; a new balance in relationswith United States through its unilateral opening-up to North Korea; andco-operation, and also competition, with China in the regional context.

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Since the terrorist attacks of 11 September, Japan has begun to trans-form its army's role. In October 2001, the Diet passed a set of laws ena-bling its forces to provide logistic support to American troops conductingmilitary operations as part of the war on terrorism. A month later, Tokyosent two destroyers and a support ship to the Indian Ocean in what wasits first military incursion in the region since the Second World War. Japanfinds itself forced to shun the indecision that characterised its responseduring the Gulf War in 1990-1991. Therefore, although in force for only twoyears and applicable only to fighting terrorism, the new legislation sets aprecedent in that it marks a shift away from Japan's traditional position(and stretches the constitutional constraints on its Armed Forces to alimit). It indicates an about-turn in the government's attitude and perhapsalso in public opinion, as well as an improvement in its ability to respondto international crises. In March 2002 it became known that new legisla-tion was being drawn up in this connection.

Another of Japan's priorities is to seek a new balance in its relation-ship with Washington. As mentioned earlier, when Mr Bush took up officehe intended to make Japan the centrepiece of the United States' Asianpolicy, and Tokyo (from 17 to 19 February) was the first stop on his offi-cial trip to the region. Japan appreciates this interest after the relativelylittle attention paid to it by the Clinton administration, but is aware that itsown perception of international problems does not necessarily have tocoincide with Washington's. These divergences came to light in recentmonths in connection with the war on terrorism, the Middle East andNorth Korea.

Like its European allies, Japan questions the United States' unilateralpolicy and recourse to military power as the only means of tackling terro-rism. Tokyo has accordingly attached importance to providing economicaid to the countries of Central Asia and to the national construction pro-cess in Afghanistan. The holding of the donors’ conference in Japan inJanuary reflected this priority.

This different approach to the problem was also manifested in the caseof the Middle East, where Japan has significant economic and strategicinterests. Nearly 80 percent of Japanese oil imports come from that region,and its policy therefore does not coincide at all with Washington's. It hasbeen offering co-operation assistance to the Arab countries and thePalestinian Authority for years and even maintains close relations with Iran.As a result, Japan disagrees with the talk of the "axis of evil" and

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Washington's policy towards the peace process and does not shareAmerica's definition of the Iraqi problem.

But perhaps it is in regional security where this pursuit of indepen-dence has been witnessed most clearly. Mr Koizumi's trip to Pyongyang inSeptember was perhaps the first time in almost half a century that Tokyoadopted diplomatic initiatives of such importance without consultingWashington. North Korea's recognition of the kidnapping of Japanese citi-zens in the eighties and the revelations, weeks later, about its nuclear pro-gramme, detracted from the significance of Mr Koizumi's step somewhat,but did not alter the fact that Washington and its Asian allies hold differentpoints of view about the regime of Kim Yong Il.

As for China, since the end of the nineties one has the impression thatthe economic growth of the People's Republic and Japan's crisis havesharpened competition for regional leadership between the two countries.The manner in which both seek greater influence in the ASEAN throughtheir respective proposals for economic partnerships is the clearest exam-ple of this witnessed in 2002. But Tokyo's concern about China's emer-gence lacks the necessary alarmism to warrant a policy directed at stallingits rise. On the contrary, both sides have shown very considerable mode-ration in the past year. The so-called "problem of history" remains aliveand Mr Koizumi had to cancel his trip to Beijing to commemorate the 30thanniversary of the normalisation of diplomatic relations between the twocountries on 29 September after China protested at his visit to theYasukuni Temple in Tokyo dedicated to the memory of the war heroes. Atthe same time, for the second year running, Japan has trimmed its deve-lopment assistance to China by 25 percent. But unless the hegemonicintentions of the People's Republic become evident, Japan will continueto be guided by a political realism that is amply justified.

Despite its growth rate, the Chinese economy is scarcely one-quarterthe size of Japan's. Its level of development furthermore makes the twoeconomies complementary rather than competitive, not to mentionChina's potential as a market and industrial base for Japanese interests,and Japan's investments in the People's Republic have grown 64 percentover the past two years. Whereas Japan regards the United States as aneconomic rival, it sees China as a difficult partner but one that is indis-pensable to regional co-operation. The development of Japanese interestsin China has also led to a closer political dialogue, both bilateral and in theframework of ASEAN+3. The aforementioned November summit at Phnom

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Penh reflected this rapprochement, which can also be interpreted as astrategic move by Tokyo to reinforce its position with respect to the UnitedStates.

The two Koreas

Although the inter-Korean summit in June 2000 aroused great expec-tations of a détente and even the reunification of the peninsula in themedium term, little progress was made the following two years. The newRepublican team who accompanied Mr Bush to the White House was intenton dropping the Clinton administration's North Korean policy, althoughafter several months of consideration, in June 2001 Washington announcedits readiness to engage in talks with Pyongyang without prerequisites.

It is therefore surprising that Mr Bush should have included NorthKorea in the "axis of evil" referred to in his address on the state of thenation on 30 January 2002. By doing so, the United States not onlydashed any chances of negotiating with Pyongyang but also underminedthe policy of one of its most staunchest allies in Asia—the South KoreanPresident Kim Dae Jung—weakening his political grip at home during hislast year of government. For its part, Pyongyang described Mr Bush'saddress as "almost a declaration of war" and threatened to reinforce itsmilitary capabilities. The months that ensued held many surprises in store.

Mr Bush arrived in Seoul on 19 February on an official visit. He attempt-ed to soften his earlier declaration in view of the South Korean public opi-nion’s growing anti-American sentiment. Mr Bush made another offer ofdialogue to North Korea, which was rejected by Pyongyang as a "pretextfor invasion". However, a few weeks later Kim Yong Il's regime re-estab-lished communications with Seoul, which had been broken off in October2001. At the beginning of April, North Korea received a special envoy sentby Kim Dae Jung, with whom he agreed to resume talks with Washington,to undertake family reunification and to foster economic operation be-tween the two countries.

Two months later, a fresh incident almost caused things to grind to ahalt. On 29 June a collision between ships in the Yellow Sea brought thetwo Koreas into conflict (according to Pyongyang, the South Korean shiphad violated its territorial waters). Clashes of these kind, which frequentlyoccurred in the past owing to disagreement over the maritime boundariesbetween the two republics, had not occurred since 1999. The immediate

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effect of this incident was to disrupt the dialogue between North Koreaand United States: on 2 July the State Department announced it was can-celling the planned trip of an envoy to Pyongyang.

However, on 25 July, in an announcement that took observers by sur-prise, North Korea apologised for the naval incident and expressed itswish to resume talks with Seoul. The declaration came days after informa-tion began to circulate about the adoption of economic reforms.Apparently, Kim Jong Il had decided to adopt some market-oriented ele-ments and put an end to the system of rationing. Some analysts foundsimilarities with the beginnings of the Chinese reform at the end of theseventies, as wages and the prices of staple goods were raised and thefirst steps towards opening up were taken by creating a special economicarea at the border with China. These changes are the first signs of whatwill probably be an inevitable transformation. But the security problemscontinued to be a focus of attention during the following weeks.

On 31 July, during the ASEAN Regional Forum meeting in Brunei, theUS Secretary of State, Colin Powell, and the North Korean foreign minis-ter, Paek Nam Sun, held the first official meeting that had taken place be-tween the two countries since Mr Bush took up office. Mr Paek stated thatthey had agreed to resume talks, while Mr Powell stressed that the agen-da should include missile exports, deployment of conventional forces atthe southern border and monitoring of the 1994 agreement on the freezingof its nuclear programme (issues that were not dealt with during the meet-ings with the Clinton administration).

The seventh round of inter-Korean ministerial talks (12-14 August), thefirst held in nine months, led to the resumption of dialogue. From 20 to 24August, Kim Jong Il visited the Russian Far East, where he attempted toglean information on the economic reforms carried out by President Putin.But the following surprise was the Japanese Prime Minister JunichiroKoizumi’s announcement on 30 August that he would travel to Pyongyangon 17 December to attempt to normalise bilateral relations following de-cades of conflict. The visit, analysed in the previous section, seemed to bepart of an attempt by North Korea to open up, though perhaps it wasmerely a tactical movement: Washington's harassment of the regime hasforced it to come out of its diplomatic isolation by making overtures to itsneighbours, South Korea, China, Japan and Russia.

However, speculation about its intentions ceased momentarily on 17October when the United States disclosed that during the deputy secre-

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tary of state for Asia-Pacific affairs, James Kelly’s visit to Pyongyang at thebeginning of the month, his interlocutors—pressured by the intelligencethe Americans had shown them—admitted to having kept secret their ura-nium enrichment programme, violating the agreed framework of 1994. Thenews not only upset the Asian balance but also brought the Bush admi-nistration face to face with two simultaneous crises with countries that aredeveloping weapons of mass destruction: Iraq and North Korea (whichperhaps explains why the United States kept the information to itself fortwo weeks).

The revelations made the Agreed Framework of 1994 a dead letter andput paid to the scant credibility that the North Korean regime may havehad. Pyongyang may have recognised its nuclear programme in order toput an end to its economic and political isolation. Perhaps it has learntfrom India and Pakistan that rearmament is its best guarantee of security.Maybe it is a manoeuvre to bolster its negotiating position vis-à-vis theUnited States. The uncertainty regarding its motives complicatesWashington's attitude and explains its doubts: North Korea is a risk forwhich formulas like those advocated for changing the Baghdad regime arenot valid. Especially when Seoul, despite the news, has not broken off dia-logue. Indeed, most South Koreans believe that Pyongyang's weaponsserve as a deterrent against United States and are not an offensive threatto them. (South Korea's attitude could change, however, following the 19December elections, in which the favourite is the Conservative Lee HoiChang, who opposes the policy of rapprochement with the North).

Washington, unable to resort to military means, had no choice but todemand that North Korea abandon its nuclear arms or prepare for com-plete economic isolation. Despite its defence capability, North Korea'seconomy is extraordinarily vulnerable: survival of the regime depends onthe food, money, fertilisers and fuel oil it receives from the United States,South Korea and Japan. However, withdrawing aid is a double-edgedsword: it could trigger a humanitarian crisis that would create very seriousproblems for the South (this is also the biggest risk from the point of viewof Beijing and Tokyo). Worse still, a regime that felt cornered could resortto military action.

On 30 October, during the first round of talks held in Kuala Lumpur tonormalise relations with Japan, North Korea not only refused to abandonits nuclear programme but even threatened to resume its missile trials ifthe negotiations failed to progress (during Mr Koizumi's visit it had pro-

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mised to honour its voluntary moratorium of 1999). On 14 NovemberWashington responded to North Korea's nuclear blackmail by breaking offtalks and adopting sanctions: no more shipments of fuel oil fromDecember onwards.

A conflict is not inevitable, but the rhetoric of both sides has causedtension to mount again. This is an unfortunate development: the currentregional landscape and its apparent attempt at economic reform suggestthat North Korea's recognition of its nuclear programme could mark thecountry's first strategic reorientation in half a century and, ironically, helpdiminish instability on the peninsula.

SOUTH-EAST ASIA

Although the United States described South-East Asia as a "secondfront" in the fight against terrorism, not all specialists were convinced ofthe link between the radical groups of the region and al-Qaeda. The attackon the Indonesian island of Bali on 12 October, in which 180 people werekilled and over 300 were injured, put an end to many people's scepticism.The terrorists enjoy little popular support and are opposed by most of theIslamist organisations, yet the problem exists and is confused with theseparatist movements and ethnic and religious conflicts in the region, notto mention the social instability caused by the economic difficulties andtensions of the democratisation process. The problems of governancehave worsened, particularly in Indonesia, where the government does notseem capable of addressing its growing problems.

South-East Asia's Islamic populations account for 20 percent of thetotal world population. They constitute a majority in three countries:Indonesia (200 million or 88 percent of the population), Malaysia (14 millionor 60 percent) and Brunei (230,000 or 67 percent). In Singapore, thePhilippines and Thailand they are a minority (15, five and four percent, res-pectively), but in the Philippines and Thailand Islamic groups have been upin arms against the central government for decades. A recent study pub-lished by the Malaysian Institute of Strategic and International Studiespointed out that South-East Asia was the region with the lowest numberof terrorist attacks in the world between 1984 and 1996. But followingsummer 2001, members of military groups suspected of ties with BinLaden's organisation began to be arrested in Singapore, Malaysia and thePhilippines. The ASEAN countries then began to discuss the problem and

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seek common policies, while Washington, after years of relative indiffer-ence, made the region a strategic priority. The Bush administration sent 660soldiers to the southern Philippines at the end of January to train Filipinosecurity forces in fighting against extremists, has strengthened its co-ope-ration with Singapore and Malaysia in intelligence matters and seeks torenew its collaboration with the Indonesian armed forces (prohibited by USCongress until the military accused of human rights violations are tried).The United States' main objective is to prevent South-East Asia becominga haven for al-Qaeda once its network in Central Asia is dismantled.

On 7 May, Malaysia, Indonesia and the Philippines signed an agree-ment on counterterrorism measures, which focus above all on improvingthe exchange of information between the security forces. The joint actionplan against terrorism adopted by the ASEAN ministerial meeting in KualaLumpur (21-22 May) was followed by a declaration agreed at the ASEANRegional Forum meeting in Brunei (1 August) by the United States and theASEAN members. It was decided to set up a counterterrorist intelligentnetwork based at the US Pacific command headquarters in Honolulu.

The attack in Bali will merely exacerbate Indonesia's national pro-blems. In addition to its economic (external debt alone stands at $130billion, equivalent to total GDP) and political problems—the fragility of itsinstitutions and the secessionist pressure—it must now tackle the war onterrorism. Before 12 October, the government was hesitant in its respon-ses. Unlike Malaysia, Singapore and the Philippines, President Megawatiavoided taking any determined action against the extremist groups. Onlyas a consequence of the international pressure did she begin to show afirmer attitude which led, in May, to the arrest of Jaffar Umar Thalib, theleader of Laskar Jihad, one of the main Islamist movements which had notbeen prosecuted for its violent attacks on Christians in the MoluccaIslands and Sulawesi. Only after the attack in Bali did the arrests takeplace of Abu Bakar Bashir, the spiritual leader of Jemaah Islamiyah, whois held responsible for the attack, and Habib Rizieq Shihab, the leader ofthe Front for the Defenders of Islam, another violent group. Despite re-peated warnings from the United States and Singapore about the planningof different terrorist attacks, the Indonesian government had not yet recog-nised the existence of the Jemaah Islamiyah. On 15 October, Laskar Jihadannounced its disbandment and shortly afterwards President Megawatisigned two anti-terrorist decrees with the support of the country's twomain Islamic organisations, Nahdlatul Ulama and Muhammadiyah.

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In the Philippines, the attacks in Zamboanga, the week after Bali,showed that the Abu Sayyaf group remains active despite anti-terroristefforts and the help of the United States (most of its soldiers abandonedthe archipelago on 31 July). The Moro National Liberation Front, at warwith the central government for over 20 years on the island of Mindanao,has even gained ground. President Gloria Magapagal Arroyo has skillfullynegotiated a new financial aid package with Washington, but now faces acomplex situation at home given the economic problems and fragility ofthe Philippines' democracy. Her crusade for "peace and order" has failedto put an end to the secessionist violence in the south of the country,which the security forces have very few means to tackle.

In Malaysia, where over 70 members of the main extremist group(Kumpulan Mujahideen Malaysia, KMM) have been arrested, the fightagainst terrorism has helped strengthen the position of the governingalliance, UMNO, and the prime minister, Mahathir Mohamed. Citizens'frustration with the corruption and authoritarianism of UMNO resulted in abigger share of the vote for the fundamentalist Parti Islam Se-Malaysia(PAS), which is now the leading opposition party following the 1999 elec-tions. Concern about Islamism has partly restored the government's lostsupport, which, in turn, enabled Mr Mahathir to announce by surprise on22 June that he would retire from politics in October 2003.

The proven link between the terrorist groups in all three countries sug-gests the existence of a broader organisation with Jemaah Islamiyah at thecentre, which advocates the establishment of an Islamic union ofIndonesia, Malaysia and the southern Philippines. The bombing in Bali istherefore regarded as a worrying warning. It indicated, first of all, thatterrorists are now shifting their targets from local to foreign interests.Second, the attack seems to be designed to harm Indonesia's moderategovernment as much as possible and accordingly trigger an instability thatwould spread to the whole of South-East Asia.

The repercussions of the attack on the tourist industry are huge, whileforeign investments—vital to the region and not yet back to normal fol-lowing the financial crisis of the late nineties—will be diverted to China, agrowing economic rival of the ASEAN countries (which explains the pre-viously mentioned proposal of creating a free-trade area between the two).Furthermore, the risk of Indonesia becoming fragmented also affects theneighbouring countries, especially the Philippines and Malaysia, owingboth to the danger of contagion of their respective Muslim populations and

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to the wave of refugees they will have to cope with. Under such condi-tions, combating social and economic circumstances that are conduciveto the mobilisation of radical groups would be an even harder task. Theproblems of governance in South-East Asia will complicate what had beena fairly stable regional security landscape up until this year.

SOUTH ASIA

India

In 2002 India's political scene continued to be marked by violence be-tween Hindus and Muslims (with over 1,200 deaths in the state of Gujaratin March), the complex balancing act of the governing coalition and theslow progress of economic reform. Despite the popularity of the primeminister, Atal Behari Vajpayee, his party (the Bharatiya Janata Party, BJP)lost its majority in three states and has not managed to stem corruption ordeliver better economic results than previous governments.

In February the Congress Party—in power in India from independenceto 1999—defeated the BJP alliance with Ahali-Dal in Punjab and the BJPin Uttaranchal. More important still were the elections in Uttar Pradesh,India's biggest state (166 million inhabitants), where the BJP also failed towin a majority. The elections thus point to the comeback of the CongressParty, which now controls 14 states, whereas the BJP and its allies haveonly four. It is thought that Gandhi's party could return to power in the2004 elections, though it will have to team up with other groups to do so:the fragmentation of Indian politics since the nineties makes it practicallyimpossible for either of the two major parties to achieve an absolute majo-rity on their own in future.

India's economy is weighed down by the heavy burden of public defi-cit, which is equivalent to 10 percent of GDP, and the lowest rate of indus-trial growth in the last decade. The political impact of its economic pro-blems has been offset by four-percent growth in 2002 due basically to therecovery of agriculture. But the variety of interests at stake makes it diffi-cult to achieve a national consensus on structural reforms. The hugepublic sector, which accounts for over 25 percent of GDP and employstwo-thirds of the population, leaves no room for manoeuvre. A furtherworrying statistic is the downturn in foreign investment: scarcely $4 billionin 2001 (compared to $47 billion received by China).

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In foreign policy, the nationalist government's strategy aimed at secu-ring the status of major power for India has translated into rapprochementwith United States. This goal coincided with the aim of the Bush adminis-tration to develop a close alliance with New Delhi, which it considered amore reliable partner than Islamabad and with which it furthermore sharedan interest in stemming Beijing's strategic ambitions. The war on terrorism,which obliged the United States to accept the support of the Pakistanigovernment, worried the Indian authorities: the country they hold respon-sible for terrorist attacks on their territory was praised as a Washingtonally. However, despite these reservations, the antiterrorist campaign andits development over the past year have brought the United States andIndia the closest they have been since the Kennedy presidency. They evencarried out (in May) their first joint military exercises for 40 years.

Pakistan

The Indian subcontinent's long-term strategic stability largely dependson whether General Pervez Musharraf remains in power. His position isincreasingly precarious, particularly after he betrayed his promises of atransition to democracy.

On 5 April, General Musharraf announced he was holding a referendumon extending his mandate for five years. The referendum, which took placeon the 30th of the month, had a turnout of between 10 and 20 percent ofvoters according to independent observers, though the government quot-ed a turnout of 50 percent and outcome of 97 percent in favour of thegeneral. The controversy over the referendum and General Musharraf'sdwindling popularity failed to deter him from his policy of tightening hisgrip: on 21 August he added 29 amendments to the 1973 constitution bypresidential decree, which Parliament cannot modify. A new security coun-cil was set up with the ability to supervise the elected government, and thepresident will be directly responsible for the appointments of ministers,magistrates and army officers.

All the parties opposed these measures. Consequently, the results ofthe elections called for 10 October hinged on the armed forces. As it tur-ned out, the elections confirmed the rise of the Islamic parties: theMuttahida Majlis-e-Amal coalition (MMA), with 50 seats in parliament,became Pakistan's third political force following the splintering of thePakistan Muslim League which supports General Musharraf (PML-Q) and

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the Pakistan Peoples Party of Pakistan (PPP) led by former Prime MinisterBenazir Bhutto. Not only have the religious parties become key players inthe formation of government; they furthermore control two of the four pro-vincial governments, Baluchistan and the North-West Province, both ofwhich border on Afghanistan.

The Islamists, whose campaign consisted of denouncing the UnitedStates' policy, benefited from General Musharraf's attack on the lay partiesthat opposed his reforms of the constitution and the April referendum. As aresult of the elections, not only is General Musharraf's position weaker; ra-ther, the rise of the fundamentalist groups is threatening national stability.

Equally dangerous is the re-emergence of al-Qaeda cells with the sup-port of extremist groups within the Armed Forces and intelligence servi-ces. An unstable country permanently in conflict with India could providethe fundamentalists with the opportunity they seek to establish an Islamicstate. Tighter oppression combined with economic difficulties and lack ofdemocratic alternatives is favouring the radicals. Forty percent of thepopulation, some 56 million people, live below the poverty line: 15 millionmore since the coup staged by General Musharraf in 1999. There are threeworst-case scenarios: the hardline military seize power; the fundamen-talists take over; or the country is plunged into turmoil, resulting, afterAfghanistan, in another failed state in the region.

Kashmir

General Musharraf's true obsession, like that of previous Pakistani lead-ers, is Kashmir. Since 1989, the Pakistani intelligence services (ISI) havebeen backing the radical Kashmiris who want independence from India.This permanent stumbling block in bilateral relations has intensified as aresult of 11 September. New Delhi, which has always attempted to have theKashmiri separatists classified as terrorists, attempted to link its own cam-paign with the United States' broader war on terror. India's support wasimportant to Washington, though it also placed it in a tricky situation withregard to Pakistan, an essential partner for getting rid of al-Qaeda and theTaliban government in Afghanistan. Preventing tension mounting betweenDelhi and Islamabad became one of Washington's priorities during the year.

After the terrorist attack on the Indian parliament on 13 December 2001by two groups linked to Pakistani services, Jaish-e-Mohammed andLashkar-e-Taiba, New Delhi announced it would declare war unless

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Islamabad proved it had ceased to support terrorist actions against India.A deadline was set (until spring) and, meanwhile, India embarked on astrategy of "coercive diplomacy" designed to increase pressure onIslamabad without having to resort to use of force. New Delhi cut off air,rail and road traffic between the two countries, recalled its diplomaticrepresentative in Islamabad and deployed more forces to the border withPakistan.

The concentration of as many as one million soldiers on both sides ofthe border and the escalating tension brought the countries close to a warin June. General Musharraf failed to comply with most of India's demands,but the risk of a conflict between two nuclear powers and the impact ofthe crisis on the fight against al-Qaeda forced the Bush administration totake action. Its constant intervention and the repeated visits of high-ran-king officials, including the secretaries of state and defence, managed tocontain New Delhi, though Washington has not been able to ease its pres-sure on the Indian government since then.

The elections in Kashmir, which ended at the beginning of October,dealt another surprise: the defeat of the party which had dominated thescene since the fifties, the Jammu and Kashmir National Conference,which is part of the coalition that governs the country. Such an outcomeruled out any possibility of accusing New Delhi of predetermining theelection result. What is more, Mr Vajpayee offered to negotiate with allthe Kashmiri political forces on the future of the region after freeelections are held. This suggests that self-government under India is apossibility.

On 16 October, New Delhi withdrew thousands of troops from the bor-der (except for the "line of control" that divides Kashmir). On the followingday Islamabad made a similar announcement. But India stated that it hadno intention of renewing talks with Pakistan unless the incursions into itsterritory ceased. Despite the military demobilisation, negotiations will haveto wait for New Delhi's talks with the Kashmiri militants and, perhaps, theexistence of a civil government in Islamabad (the army will not relinquishits goal of taking over the Indian province).

CONCLUSIONS

The problems of Kashmir, Islamic terrorism in South-East Asia, NorthKorea and Taiwan will not disappear in 2003. But all these issues illustrate

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the diversity of the security problems—and their development—affectingAsia's three strategic environments.

— Whereas, in the Indian subcontinent, New Delhi and Islamabadremain immersed in the conflict that erupted when they gainedindependence and is symbolised by Kashmir, the tension betweenboth sides has ceased to be a bilateral issue and has acquired aregional and global dimension as they are both nuclear powers. Thepolitical situation in Pakistan is an additional cause for alarm.

— In South-East Asia, countries which generally approached theirsecurity problems from an internal perspective are now witnessinghow the emergence of terrorist groups is obliging them to reconsi-der their strategic concepts. They have gone from being concernedabout national stability to organising a joint manner of addressingtransnational threats.

— In the Northeast, the Korean peninsula and Taiwan are relics of theCold War and the main reason for the traditional policy of powerbalancing, which is nonetheless developing as China grows andJapan loses relative power. However, without renouncing theirnational priorities, Beijing and Tokyo—together with Seoul—areshowing a progressive strategic convergence, which, in themedium term, could give way to a new political and military ba-lance. Their extension to South-East Asia would be an inevitableconsequence, establishing an area of security that would oblige theUnited States to redefine its role as guarantor of regional stability.

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EPILOGUE

EPILOGUE

THE BUILDING OF EUROPE

By Javier Pardo de Santayana

The last summit of the year ended with two major successes which re-late to developments of far-reaching importance in the building of Europe.

The Copenhagen European Council, held on 12 and 13 December, gavethe go-ahead to the biggest enlargement ever undertaken throughout thiscomplex process, confirming the results of the October summit in Brussels.Enlargement will take place on 1 May 2004 and will result in a Union of 25countries with a total population of 450 million. Poland, the only "big"country of the ten candidates, asserted itself by pressing its demands tosuch an extent that the Danish presidency had to remind it that it could beexpelled from the group. The Union ended up making substantial conces-sions to Poland. Romania and Bulgaria will have to wait until 2007, as envi-saged. And Turkey had to make do with an arrangement it had previouslyconsidered unacceptable to its public opinion, according to which a datefor beginning negotiations will be set once, in December 2004, it proves tohave met the democratic requirements for belonging to the Union.

The fact that the Turkish government agreed to this arrangement indi-cates that it intends to overcome the misgivings to which the politicalearthquake of the arrival in power of an Islamist party may have given rise.What is more, Turkey withdrew its reservations about "Berlin Plus". This isprecisely the second major success of the Copenhagen summit, since itwill allow the process of shaping the European security and defence

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dimension to continue, the European military force to achieve operabilityin 2003, and the Union to at last assume responsibility for operations in theBalkans and, more specifically, as intended, for "Amber Fox" inMacedonia. However, it was too late to solve the problem of the reunifica-tion of Cyprus and, although Ankara promised to adopt a constructiveposition, Cyprus's accession to the Union continues to be limited for thetime being to the Greek part of the island.

As regards the problem of Iraq, the Union waited expectantly to see howthe situation developed, refraining from establishing a common position for thetime being. Germany qualified its election promise of not becoming involved ina possible attack by announcing that, if necessary, it could deliver "Patriot" mis-siles to Israel and authorise flights and stopovers at its American bases.

In operation "Enduring Freedom" conducted in the Indian Ocean,Spanish warships pursued the "So San", a ship flying no flag and includedon the list of suspicious vessels. It fled and was eventually captured after theSpanish vessels fired several warning shots. Concealed beneath a cargo ofcement were an undocumented shipment of chemical products and 15Scud missiles from North Korea, one of the countries regarded by the UnitedStates as belonging to the "axis of evil". The shipment was bound preciselyfor the Middle East, that is, an area that is particularly conflictive and highlytopical owing to the possibility of the military operation against Iraq.

America's interest in preserving Yemen's friendship prevailed overother considerations when Yemen claimed the shipment and the operationended in the release of the vessel. It remains to see how, at the currenttime, the deployment of several Scud missiles in such an unstable areacan be justified; the capture of the "So San" therefore raises certaindoubts about the coherence of Washington's efforts to crack down on theproliferation of weapons of mass destruction.

Relations between Spain and Morocco, which were tense for a goodpart of 2002, improved slightly as a result of two events: the return visitpaid by the Moroccan foreign minister after his Spanish counterpart visi-ted Rabat shortly after the "Perejil" crisis and the Moroccan king's offer tolet Spain use his country's fishing grounds in view of the disastrous effectsof the accident of the "Prestige" oil tanker on northern Spain's coasts.These overtures could have a lot to do with Spain's seat on the UnitedNations Security Council from 1 January 2003.

The active response of the Spanish government and the Europeantransport commissioner enabled the problem of the risks posed by vessels

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carrying potentially hazardous cargoes that do not meet minimum securityrequirements to be fitted into the agenda of the Copenhagen Summit, anda set of measures designed to increase the safety of the maritime trans-port of dangerous cargo was approved. Meanwhile, many European Unionships co-operated with Spanish vessels in an operation designed to miti-gate the effects of the "Prestige" disaster. France and Spain immediatelyagreed to take steps to ban the traffic coastal of suspicious vessels, andPortugal and Italy promptly joined in this decision.

Protecting the environment was precisely one of the new aspects ofthe Strategic Defence Review which was presented by the Spanishgovernment to Congress on 19 December and extends to 2015. Thisreview addresses the new threats, particularly terrorism and the prolifera-tion of weapons of mass destruction, explaining how they affect the use ofthe Armed Forces, and establishes a joint rapid response force.

As for the economy, the good news came on 5 December that interestrates, which had remained unchanged for over a year, were to be lowered.The 0.5 percent cut bringing rates down to 2.75 percent should be inter-preted as an attempt to activate the French and German economies, par-ticularly the latter, which became further bogged down as the year pro-gressed. This is a cause for concern for Spain, whose problem is notgrowth as such, as it is still growing at a considerably higher rate than theEU average, but rather inflation. This problem could be worsened by thedecision of the European Central Bank, which also lowered its growth fore-casts for the euro zone and estimated that economic recovery would bedelayed to 2004 as a result of the current uncertainty that is reflected in asituation the bank describes as "disappointing".

CENTRAL AND EASTERN EUROPE AND EURASIA

By María Angustias Caracuel Raya

In December 2002 the Balkans and the Russian Federation were themain focuses of attention in the field of security owing to very different rea-sons and circumstances that arouse contrasting feelings.

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On the one hand, the presidential elections in Serbia and Montenegroon the 8th and the 22nd, respectively, will have to be repeated in bothrepublics as in both cases voter turnout failed to meet the minimum 50percent. As the conclusions of the reports by the OSCE and the Councilof Europe parliamentary assembly show, in the short term it will be neces-sary to consider abolishing this requirement for future elections bearing inmind the huge cost of these failures in terms of citizens' confidence andthe international credibility of both Yugoslav republics.

However, more encouraging events have taken place on the Balkanpeninsula. On the one hand, an agreement has been reached on Prevlakaas a result of the direct negotiations between Croatia and the YugoslavFederal Republic. The Montenegrin authorities participated in these talks,which were supervised by the EU's secretary-general/ high representativefor common foreign and security policy, Javier Solana. On the other hand,Croatia and Yugoslavia have signed a free-trade agreement which envisa-ges abolishing tariffs by 2007. These agreements will not only help nor-malise political relations between both countries but also improve theirprospects of economic co-operation by boosting trade and investments,thereby fostering regional stability.

However, the situation in the Former Yugoslav Republic of Macedonia(FYRM) required considerable attention from the European regional orga-nisations and member states given the possibility of the EU taking controlof the NATO-led "Amber Fox" mission. However, the expected agreementbetween the Atlantic Alliance and the EU, which will allow the Unionaccess to NATO planning capabilities, was postponed until the 16th, thedate that NATO's mandate in Macedonia expires, and after theCopenhagen European Council of the previous week.

Although the EU had expressed its willingness to take over the militaryoperation in the FYRM as soon as possible (paragraph 28) and to lead amilitary operation in Bosnia as a continuation of SFOR (paragraph 29), thelack of a permanent arrangement between the EU and NATO led theAlliance to extend its mandate in this country, in response to PresidentTrajkovski's request. The new operation, called "Allied Harmony", will havea twofold objective: to support the work of the international supervisorsand to assist the Macedonian government in guaranteeing the security ofthe country. It is to be hoped that, once this NATO mandate expires andthe EU completes its list of military options and corresponding plans, theUnion will finally take the lead in this area, helping minimise any potentialdanger of destabilisation.

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However, instability worsened in Chechnya in December, particularlyfollowing the attacks carried out by kamikaze terrorists in Grozny, the capi-tal, where over 60 people died, and in the Chechen city of Argun, althoughon this occasion nobody was killed. The overall situation in Chechnya con-tinues to deteriorate and risks being drawn into an action-reaction spiral ofviolence that will be difficult to overcome if the federal government conti-nues to accuse the Chechen guerrilla of its links to international terrorismand the guerrilla to blame the government for violating human rights.

According to information released by the Russian authorities inDecember, the number of casualties since 1999 resulting from Moscow'smilitary intervention in the republic that seeks independence amounts to14,316 on the part of the Chechen rebels and 4,700 on the part of Federaltroops. However, there is no information about the civilian population,though it is reckoned that over 140,000 Chechen refugees are currentlyconfined to camps in Ingushetia, suffering the consequences of a conflictthat seems endless.

Although the peace plan designed by Moscow for the separatist repu-blic envisages holding a constitutional referendum in March, which shouldbe followed by legislative and presidential elections, it will be difficult toimplement the so-called "normalisation process" in the republic if the plandoes not allow the Chechen sectors that do not back violence to partici-pate.

In this context, the role of the international organisations continues tobe limited. Since the signing of the Founding Act in May 1997, NATO andRussia have made it clear that one of the principles that would regulaterelations between both sides would be respect for the sovereignty, inde-pendence and territorial integrity of all the states. The European Union hasmaintained the same position. Even so, their respective secretaries gene-ral, Lord Robertson and Javier Solana, carried on attempting to exercisetheir political influence, placing particular emphasis on the idea that themethods used to settle a conflict should always be proportional and thisshould be applicable not only to the Chechen conflict but also to any con-flict in which military action is involved. In particular, during his trip toMoscow on the 9th, Lord Robertson pointed out that use of military forceshould always be accompanied by a political strategy, as otherwise, itwould fail in the attempt to resolve this conflict.

The OSCE, in contrast, has an excellent opportunity to give fresh impe-tus to finding a lasting solution for this north Caucasian republic, particu-

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larly if it continues to defend one of the goals of the Assistance Groupestablished by the organisation on 11 April 1995, whose mandate expiredon 31 December 2002, namely:

To promote the peaceful resolution of the crisis and the stabilization ofthe situation in the Chechen Republic, in conformity with the principle ofthe territorial integrity of the Russian Federation and in accordance withOSCE principles and "pursue dialogue and negotiations, as appropriate",with a view to establishing cease-fire and eliminating source of tension.

All in all, a new OSCE decision strengthening the Assistance Group forChechenya is considered essential if the peace plan sponsored by Russiais to satisfy, as far as possible, both sides' aspirations. International publicopinion demands this. If this fresh opportunity is wasted in 2003, the situa-tion would reach a very dangerous limit which, if crossed, would makeChechnya, as some analysts have pointed out, a second Palestine versusIsrael, only in Russia.

THE MEDITERRANEAN

By María Dolores Algora Weber

As regards the "Iraqi question" and the "Palestinian question", thesituation in the Middle East has continued to worsen with tension moun-ting and violence escalating, as in previous months.

The inspectors from the United Nations Monitoring, Verification andInspection Commission and the International Atomic Energy Agency set towork at the end of November and continued throughout December, failingto find any traces of the manufacture and storage of weapons of massdestruction.

Nonetheless, the results of the inspection have aroused different reac-tions which have caused international tension to mount. Although theUnited Nations Secretary-General, Kofi Annan, declared at the end of themonth that there were no grounds for justifying an attack on Iraq, theUnited States' position is not consonant with these conclusions.

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The Iraqi report submitted to the Security Council on the country'sweapons arsenals was received with huge scepticism by the US adminis-tration, which did not hesitate to express its doubts about the truthfulnessof the information and the omission of important questions. A few dayslater, Hans Blix, the chief weapons inspector, stated that the informationprovided by the Baghdad regime was only slightly more extensive than theknowledge possessed in 1998, when the inspectors were forced to leave.

On the one hand, Saddam Hussein has been co-operating with the in-spectors, allowing them to perform their work without interruptions.However, on the other hand, he has accused them of spying for the UnitedStates and Israel, particularly when they asked for lists of scientists in-volved in the weapons programmes.

These circumstances allowed President Bush to start preparing for anattack on Iraq, leaving the decision of when for the end of January orbeginning of February 2003. US troops have been stationed in the Gulfregion, where they await instructions. Britain and France have also begunto take precautions.

The Moscow government toughened its attitude towards SaddamHussein's regime after contracts with the three men Russian oil companieswere terminated. This move has not done Iraq much good as it risks losingthe support of the Russian Federation in the United Nations SecurityCouncil. At the same time Saudi Arabia, another of the key players in theregional strategic landscape, while not distancing itself from the US, hassurprisingly re-established communications with the Iraqi government,interrupted during the Gulf War of 1991. Everything seems to indicateSaudi Arabia's willingness to mediate before a conflict erupts.

In view of the circumstances, the Iraqi opposition to Saddam Husseinmet in London and reached a basic agreement on the future of Iraq oncethe current regime has been toppled. Although divided among 50 politicaland religious groups, they managed to reach a decision to set up a com-mittee that would govern the country provisionally and eventually be re-placed by a multi-ethnic, democratic and federal government. But we willhave to wait and see whether or not the intention to maintain a united Iraqistate evaporates during a possible post-war period.

Public opinion has basically come to terms with the idea that there willbe some kind of conflict against Iraq sooner or later, even though theoutlook is still very unclear and international attitudes vary.

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The "Palestinian question" continued to be caught up in a wave ofPalestinian suicide attacks and Israel's response in the territories of theNational Authority.

At the beginning of the month, the prime minister, Ariel Sharon, spokeof the idea of creating a Palestinian state. However, the Israeli politician'splan was rejected by Yasser Arafat since, according to the spokesman forthe negotiations, Saeb Erekat, what was offered was once again an inte-rim agreement on the future of Palestine.

Yasser Arafat asked the al-Qaeda network and Osama bin Laden tostop hiding behind the Palestinian cause, since inciting young people tocarry out attacks against the Israeli population is counterproductive toPalestinian interests.

We continued to witness the occupation of Palestinian territories by theIsraeli army, which made use of excavators, tanks and helicopters andkilled innocent civilians. The death toll at year end amounts to over 2,778since the beginning of the second intifada in September 2000, 2,049Palestinians and 680 Israelis.

The so-called "Madrid Quartet" (United States, Russia, EuropeanUnion and United Nations) again appealed for the end of violence andIsraeli withdrawal from the Palestinian territories. However its declarationsfailed to lead to any action.

In view of the foregoing, the Palestinian president has called off theelections scheduled for January 2003 indefinitely, since it is impossible forthem to take place in current conditions.

The United States continues to centre its attention on the Iraqi issue and,given the possibility of a widespread conflict in the Middle East, once againis stretching international legislation to a limit in its support of Israel. Duringthe month the Security Council issued a resolution condemning Israel for thedeath of three United Nations staff in the Palestinian territories in November.The resolution accused the Israeli government of disproportionate use offorce and destroying a United Nations Food Programme warehouse in Gaza,killing three members of the international organisation. After the SecurityCouncil resolution had been approved by 12 votes, including that of GreatBritain, the United States decided to exercise its right of veto, showing upthe legislation of the Geneva Convention on the civilian victims of humanita-rian organisations. President Bush has also lowered the status of the PLO'soffice in United States, which will be reviewed in six months' time.

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On a different subject, in December we also witnessed certain progressin Turkey, both in its domestic policy and in its relationship with theEuropean Union.

The Turkish parliament voted in favour of the constitutional amendmentratified by President A.N. Sezer, allowing R.C. Erdogan to take up his postof prime minister. This has settled the problem arising from the Novemberelections in which the Justice and Development party won, but its leaderwas unable to exercise his post owing to an 1998 conviction banning himfrom public office for inciting to religious hatred. He will be able to takeover from the current prime minister Abdullah Gul in February 2003.

As for Turkey's negotiations on accession to the European Union, theAnkara government took advantage of the Copenhagen Summit to get theCouncil of Europe to set a date for assessing its candidature. After intensediplomatic demarches to the European leaders, Turkey managed to getthem to fix a date, December 2004, although its intentions became clearwhen it announced its willingness to make every effort to ensure it meetsthe European Union criteria much earlier, by October 2003.

The situation in Turkey has given impetus to the "issue of Cyprus". TheTurkish government proved willing to settle the division of the island,hoping for a satisfactory response from its European partners. However,although this decision went down well, care was taken not to treat it as arequisite or lever to pressure the European Union, which did not considerunification an essential requirement for the accession of the Republic ofCyprus. Greece, for its part, has also adopted a more flexible positionregarding this dispute, agreeing to abide by the settlement plan that theUnited Nations is currently drawing up.

Spain's bilateral relations with Morocco improved during December.The foreign ministers of the two countries, Ana Palacio and MohammedBenaissa, met in Madrid. This meeting replaced the visit that should havetaken place in September. Both states clearly showed a wish to normalisetheir relations, although a date for the return of their ambassadors has yetto be set.

Following the ecological disaster caused by the sinking of "Prestige"off the Galician coasts, King Mohammed VI of Morocco opened upMoroccan fishing grounds to Spanish fishing vessels. The Madrid govern-ment interpreted this as a gesture of goodwill which will hopefully lead toan improvement in relations with the Rabat government.

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IBERO-AMERICA

By Marcelino de Dueñas Fontán

In December events in Venezuela were particularly significant. Thefourth general strike Mr Chávez faced in one year began on the 2nd and isdue to last indefinitely, and, indeed, it continued as 2002 ended. Called bythe opposition parties which teamed up to form the Democratic Co-ordi-nation Committee, it was backed by the main employers' association,Fedecámaras, and workers' union, the Confederation of VenezuelanWorkers (CTV). The strike aims to find a peaceful, democratic and electo-ral solution to the grave crisis that is ravaging the country: violence,corruption, disastrous management of the economy and a discreditedpolitical class.

The opposition had presented over three million signatures asking fora referendum to decide on the continuity of Mr Chávez's rule, which thepresident opposes. However, in accordance with the Supreme Court ofJustice, the Electoral Council agreed to call the referendum for 2 February.The question will be: "Do you agree with asking the president of theRepublic, citizen Hugo Rafael Chávez Frías, to resign voluntarily?"

The secretary general of the OAS and former Venezuelan presidentCésar Gaviria, putting in practice an OAS initiative, sponsored talks aimedat getting both sides to agree to settle the problem at the polls.

On the 6th, growing pressure in the streets prompted Mr Chávez to usean indeterminate number of gunmen and snipers, who fired shots at thedemonstrators and wounded several.

In a short article entitled "Chávez, the Castro-style murderer" pub-lished in La Razón, the newspaper of which he is director, on 8 December,the prestigious Spanish journalist Luis María Ansón states that this is thesecond time Mr Chávez has sent gunmen from the Bolivarian Circles tobreak up a public demonstration with gunfire. He denounces the Stalinistprocedures used by Mr Chávez, which are clearly expressed in hismaxims: "It is not permitted to uphold any ideology that strengthens thedefunct democracy" and "Opponents must be combated with the wea-pons of terror". He describes Mr Chávez as a protector of ETA terrorists,sponsor of the Colombian guerrilla and the man who has armed the

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Bolivarian Circles, the pro-communist militiamen who are prepared to killin order to protect their privileges.

To counter the effects of the strike on Venezuela's economy, particu-larly its substantial petroleum industry, Mr Chávez ordered the army to raidoil tankers, which helped keep the spectre of famine at bay. On the 16ththe police used real fire against the first demonstration known as the "tran-cazo" aimed at blocking Caracas's roads, which was followed by severalothers.

Playing for time, Mr Chávez insisted that, in accordance with theConstitution, the referendum should be held at the end of his mandate, inAugust 2003. What he does not realise is that the law can also be amen-ded to bring forward the election, just as he has introduced substantialamendments to the Constitution since coming to power in order to adaptit to his totalitarian practices, including an invasion of the legislature andthe judiciary.

In an interview with the newspaper ABC published on 23 December,the secretary-general of the Venezuelan trade union (CTV), Manuel Cova,explains, clearly contradicting the ideas of nostalgia for communism, that70 percent of Venezuelans are poor and that fewer than 25 percent sup-port Mr Chávez, and that it is therefore not true that all the poor peoplevote for him. Perhaps 50 percent of the poor is a more realistic figure. Asthe former foreign minister Miguel Angel Burelli Rivas told the BBC, at least80 percent of Venezuelans oppose Mr Chávez.

For the time being, the military continue to support Mr Chávez. TheArmed Forces, traditionally not affected by party rivalry, now seem to bepoliticised, though it is not clear what attitude they would take in the eventof civil strife.

Although the negotiations may soon arrive at an agreed solution, theopposition is preparing the people to take the presidential residence ofMiraflores, for which there is talk of 23 January and 2 February as dates;the second would coincide with the envisaged referendum, though it isdoubtful it will be held.

Other interesting developments in December occurred in Argentina,Brazil, Mexico and Ecuador.

In Argentina, on 2 December the government put an end to the "corra-lito", and Argentines were able to withdraw almost two-thirds of their bank

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deposits which had been frozen (some $5.8 billion), though the "corralón",the restriction on deposits transformed into fixed-term deposits (over $3billion), remains in force. A calm atmosphere and stability of the peso werethe most prominent features. As of year end, an agreement with the IMFseems very near.

In Brazil, Luiz Inacio Lula da Silva was sworn in as the president of theRepublic on 1 January. The ceremony was attended by a large number ofIbero-American dignitaries and the Prince of Asturias.

On 11 December, after eleven years of negotiations, Chile and theUnited States agreed to sign a bilateral treaty on free trade. The agreementpaves the way for a future free trade area (FTAA) throughout the continent,for which negotiations will begin in 2003 and are expected to end in 2005.

The president elect of Ecuador, the retired colonel Lucio Gutiérrez, paida visit to Spain and on 20 December was received by His Majesty the Kingand President Aznar. Speaking in Madrid, he defined himself as a nonpar-tisan, advocate of dialogue, patriotic, sociable and deeply Christian. Headded that his values are those that the Christian religion teaches: free-dom, justice and peace. He confessed that the malicious comparisonswith Hugo Chávez bothered him and that he had not even spoken on thetelephone with Mr Chavez or Mr Castro.

Let us hope that no new leaders emerge who succumb to the tempta-tion of totalitarianism and that the systems of this type that are in place insome countries soon give way to democratic alternatives.

AFRICA

By Alejandro Cuerda Ortega

Democratic Republic of the Congo (DRC)

Following the initial agreements reached in July between the presidentof the nation, Joseph Kabila, the Ugandan and Rwandan presidents andthe leaders of the different clashing parties and factions, a new agreement

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for the pacification and democratisation of the country was signed on 18December, also in Pretoria. The agreement establishes a two-year transi-tion period during which Mr Kabila will continue to be president of thenation and will share the task of governing the country with four vice-pre-sidents appointed as follows: two representatives of the two main parties,the RCD (Congolese Rally for Democracy) and the MLC (Movement for theLiberation of the Congo); one representative from the unarmed opposition;and one from civil society. The transition government departments weredivided among the signatories, who were awarded seven each and entrus-ted with the basis task of preparing for the general elections in 2004.

The precariousness and fragility of this situation, commented on pre-viously, was confirmed by a number of incidents that do not bode well forthe country's future: the leader of the RCD, Adolfo Onusumba, asked fora thousand soldiers to be placed under his control to guarantee the secu-rity of his group, which the head of MONUC described as a "recipe forchaos"; when asked about the possibility of his army returning to DRCongo in an interview carried out by the Financial Times, the president ofRwanda, Paul Kagame, said "We might go back. I don't rule that out andwe won't ask anybody for permission. The only thing that will dictate whatcourse of action we take will be facts on the ground", once again allegingsecurity reasons for his nation, while Rwandan dissidents take refuge inthe neighbouring nation.

Côte d'Ivoire

At the end of the year the instability triggered by the military uprisingand attempted coup in September continued, with each side blaming theother. After several attempts by the ECOWAS and France to reach a peaceagreement, on 1 November, in Lomé (Togo), encouraged by the presidentof the host nation, Mr Eyadema, the rebels and the government finallymanaged to outline an amnesty agreement for the 750 rebel military, whichwill allow them to keep their jobs. But what failed to be sorted out was theserious situation in the north of the country, which is held by the rebels andIslamists; and the conditions imposed by the dissidents were even moredifficult to meet as they called for the resignation of President Gbagbo, thedrawing up of a new constitution and the holding of elections.

Nine days later the talks were broken off yet again and fighting re-sumed, which continued until the end of the year. On 31 December a

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government helicopter attack killed twelve people and put paid to thefragile truce established days earlier for the Christmas period.

France continued to support Mr Gbagbo's government and persuadedthe parties to meet again in Paris on 15 January.

Equatorial Guinea

The presidential elections, originally scheduled for 2003, were broughtforward by Teodoro Obiang Nguema to 15 December. In view of the combi-nation of circumstances, there was little doubt beforehand as to what the out-come would be—fully favourable to the leader: he had won the previous elec-tions with 99 percent of the vote; dissidents were subject to strict control andsurveillance; the opposition leader had been put in jail six months earliertogether with another 60 political adversaries; there were entrance restric-tions on the international press; and the government made a suspiciousstatement about the official census of inhabitants, citing the figure of 1,014,999,whereas the previous year the figure had been taken to be 500,000.

Three hours after the polling stations were opened, the four oppositionparties announced they were standing down due to abnormalities and irre-gularities, such as the fact that at 90 percent of the voting took placepublicly as opposed to secretly, ensuring 100 percent of the vote forObiang Nguema at most of the stations. In some cases people presidingover the polling stations were arrested for attempting to make voting secret.

After describing the withdrawal of the opposition as "illegal", the inte-rior minister and president of the election committee announced the out-come—99 percent of the vote for the Democratic Party of EquatorialGuinea, meaning that Teodoro Obiang Nguema's mandate will be exten-ded for another six years.

Kenya

The end of the year brought two events of great significance. The firstwas the terrorist attacks in Mombassa on 28 November: two missilesmissed an Israeli plane during takeoff, and 13 people were killed and over80 injured in an attack against a hotel used regularly by Israeli tourists. Theterrorist group al-Qaeda, which has often threatened Israeli and US inte-rests, claimed responsibility for the attack.

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It is worth remembering the August 1998 attacks against the USembassies in Nairobi and Dar-es-Salam in which 224 people were killed.Al-Qaeda was also held responsible for these attacks. The choice ofKenya as a target by the terrorists can be explained not only by the regu-lar presence of Israelis but also by its proximity to the areas and nationswhere factions of this criminal organisation are known to exist, such as theHorn of Africa and Yemen.

The other news is the presidential elections held in Kenya on 27December, which marked the end of the 24-year uninterrupted mandate ofDaniel Arap Moi. Despite the many cases of corruption during Mr ArapMoi's mandate, Kenya stood out among its neighbouring countries for itspolitical stability and peaceful social life. Such characteristics are surpri-sing bearing in mind the country is surrounded by states which have beentormented by instability or cruel armed conflicts for many years, such asSomalia, Sudan, DR Congo, Uganda, Rwanda, Burundi, Ethiopia, Eritreaand Zimbabwe.

The two presidential candidates, Uhuru Kenyatta—the son of thecountry's first president and the candidate sponsored by the outgoingArap Moi—and the favourite, 71-year old Mwai Kibaki, are moderate peo-ple who made cracking down on corruption and determination to lick theailing economy into shape the centrepiece of their election campaigns. Itis reckoned that over half the population of 30 million live on less than oneeuro a day, and that 10 percent are infected with the AIDS virus.

The elections took place in a peaceful and exemplary manner. Evenbefore the votes were counted Mr Kibaki was assumed—correctly, as hesecured 63 percent of the vote—to be the winner. His win put an end to thelong-lasting dominance of the KANU party (Kenyan African National Union).In his initial statements he said his government's first task was to put anend to corruption and show their wealth and where it had come from,establish an anticorruption institution and trim down the civil service.

The EU has expressed its satisfaction with this result and stated it willshortly renew its aid to this African country.

Controlling immigration in Spain

At the end of 2002, the Spanish government published some interes-ting statistics about African immigration: 74,000 illegal immigrants were

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returned to their countries of origin, 58 percent more than the previousyear. Also 735 people-smuggling organisations were disbanded and 2,070of their members arrested, 69.25 percent more than in 2001.

ASIA

By Fernando Delage

During the last weeks of 2002, tension on the Korean peninsula wasthe main Asian security concern. On 12 December, Pyongyang an-nounced it was reactivating its nuclear programme, which had beenfrozen since 1994. This announcement came as a result of the UnitedStates' decision to suspend shipments of fuel oil to North Korea after thelatter admitted (in October) it had secretly continued with an uraniumenrichment programme.

Observers coincide in their interpretation of the decision as an attemptto force the United States to return to the negotiating table: the officialcommuniqué stated that whatever was done in the future depended on theUnited States. But Washington continues to refuse to hold any talks unlessPyongyang promises nuclear disarmament. Meanwhile, the USA will con-tinue with its policy of sanctions. According to some analysts, the econo-mic collapse of North Korea is the fastest and surest way of getting it todisarm, but it also poses considerable risks: Pyongyang could resort touse of force if it feels threatened. A compromise solution of some kindseems inevitable, though the question is which side will be first to stepdown in this escalating rhetoric.

The declaration came days before the presidential elections in SouthKorea on 19 December, in which the differences between the main candi-dates related to their attitudes towards the North. The winner was RohMoo Hyun, of the governing Democratic Party of the Millennium, who willcarry on with the sunshine policy towards Pyongyang that has been pro-moted since 1997 by his predecessor Kim Dae Jung. The United Stateshad staked its bets on the opposition candidate, Lee Hoi Chang, who is infavour of taking a harder line with the North Korean regime. Washington's

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support has probably fuelled the growing anti-Americanism that iscurrently being witnessed in the country and drove younger voters tochoose Mr Roh, who advocates greater independence in foreign policy.

The tension continued during the following weeks when North Koreadeployed two machine guns to the demilitarised zone—violating thearmistice agreement that marked the end of the Korean war in 1953—andthree inspectors from the International Atomic Energy Agency left thecountry on 31 December. Pyongyang announced it was removing the IAEAtags and surveillance cameras from its nuclear power stations in additionto threatening to withdraw from the Nuclear Non-Proliferation Treaty.

China, South Korea and Japan stressed the need to denuclearise thepeninsula but they all stated they would maintain their own channels ofdialogue with Kim Jong Il's regime (neither Beijing nor Seoul wishes tohave to cope with the humanitarian crisis that the economic collapse ofNorth Korea would provoke). Mr Kim accused the United States of drivingthe peninsula to the edge of the abyss and claimed to possess defensiveand offensive capabilities for defeating the enemy. This situation triggeredconcern about Washington having to face a second military front when itis already involved in the preparations for a possible attack against Iraq.On 7 January, while Pyongyang described the US sanctions as a declara-tion of war, after a meeting with Japanese and South Korean diplomats theUS state department again stressed its readiness to hold talks if NorthKorea renounces its atomic bombs.

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COMPOSITION OF THE WORKING GROUP

Coordinator: D. JAVIER PARDO DE SANTAYANA Y COLOMAArmy Lieutenant General (Rve.).Diplomas from the Spanish and US General Staff colleges.He previously served as the first head of the SpanishMission to the Supreme Commander for Europe, JointChief of Staff, Chief of Troops and Military Governor of LasPalmas de Gran Canaria, Chief of the Western PyreneesMilitary Region and Director of the Centre of NationalDefence Studies.A lecturer on international strategic and military themes,author of articles and contributor to prominent military andcultural publications.Member of EuroDéfense-Spain.

Secretary: D. FERNANDO DE LA GUARDIA SALVETTINavy Captain (Rve.).Holds diplomas in Naval Warfare and Joint General Stafffrom Spain and the US.Formerly Chairman of the Naval Board (NATO).Currently holds a post at the Spanish Institute for Stra-tegic Studies.He has written articles and analyses, mainly on navaltopics, for naval history journals.

Members: D. RAMÓN ARMENGOD LÓPEZAmbassador of SpainHolds a degree in Law and Political Sciences.Ambassador of Spain in Kuwait and the United Arab Emi-rates (1972-1976); Consul General in Jerusalem (1981-1984); Ambassador of Spain in Jordan (1987-1991); Di-rector of the Diplomatic School (1991-1994).Lecturer at the Department of International Relations of theComplutense University, Madrid, and the Diplomatic School.Member of the Club of Rome and Vice Rector of the So-ciety of International Studies.

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Dª MARIA ANGUSTIAS CARACUEL RAYAPhD in Political Sciences and Sociology.Formerly a researcher with the North Atlantic Assembly,the WEU Institute of Security Studies and NATO.Has taken part in the security studies program of theUnited States Information Agency (USIA) of the US StateDepartment and the EU TEMPUS Program (Trans-Euro-pean Mobility Program for University Studies) in Centraland Eastern European countries.She is currently an International Security and DefenceAnalyst at the Secretariat General for Defence Policy.She has written a number of books and articles onEuropean security and defence.

Dª MARIA DOLORES ALGORA WEBERPhD in Contemporary History.Assistant lecturer in Contemporary History and Inter-national Relations at the San Pablo CEU University.Holds a diploma in International Relations from theSociety of International Studies.Masters degree in Peace, Security and Defence from theGutierrez Mellado Institute, UNED.European Union observer for the Palestinian elections(1996) and OSCE supervisor in Bosnia Herzegovina (1996,1997 and 1998).

D. FERNANDO DELAGE CARRETEROAssistant director of the Journal “Política Exterior”.Lecturer on Security in Asia-Pacific at the GeneralGutiérrez Mellado Institute.Lectures regularly on Asia at the Complutense Univer-sity, the Diplomatic School and the Armed ForcesSchool.Guest lecturer at Yokohama National University (Japan) in2002.Author of various publications.Co-editor of the publication "El nuevo orden internacionalen Asia-Pacífico” ("The new international order in Asia-Pacific", 2002).

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D. MARCELINO DUEÑAS FONTÁNRear Admiral of the Navy (Rve.).Holds a diploma in Naval Warfare.Formerly Deputy Director General for Medical Care andSocial Action (Ministry of Defence), head of the AuxiliaryAgency of the Logistic Support Command and Director ofNaval Infrastructure.

D. ALEJANDRO CUERDA ORTEGANavy Captain (Rte.).Holds a diploma in Naval Warfare and Joint General Staff.He completed the Naval Command Course at the NavalWar College in Newport, USA and the NATO DefenceCollege.He previously served as Secretary of the Spain-USStanding Committee and as Naval Attaché in London.He formerly held a post at the Spanish Institute forStrategic Studies (1992-1999).

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INDEX

Page

CONTENTS ........................................................................................ 9

INTRODUCTION................................................................................. 11

Chapter I

A STRATEGIC OVERVIEW OF 2002/2003 ......................................... 15

Introduction ........................................................................................ 17America’s greatness ........................................................................... 18— Consequences of 11 September 2001......................................... 19Relations between Europe and the US in 2002................................. 23— Contrasting mutual perceptions ................................................... 24Conclusion.......................................................................................... 27Events of 2002 ................................................................................... 27Spain’s foreign policy in 2002 ............................................................ 29— The Spanish presidency of the EU............................................... 30— Current formulation of Spain’s foreign policy ............................... 34

Chapter II

THE BUILDING OF EUROPE ............................................................. 39

Overall impression.............................................................................. 41The Barcelona summit (15 and 16 March) ......................................... 50The Seville summit (21 and 22 June) ................................................. 51The Brussels summit (24 and 25 October) and the presentation of

the work of the convention ............................................................ 54A strategic year for Spain................................................................... 56

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Chapter III

CENTRAL AND EASTERN EUROPE AND EURASIA ......................... 61

Introduction ........................................................................................ 63The Baltic states, on the doorstep of the European institutions ....... 65Central Eastern Europe: torn between hope and the uncertainty of

integration..................................................................................... 66South-East Europe: torn between consolidating democracy and the

survival of the state ...................................................................... 68The Commonwealth of Independent States: in pursuit of a new stra-

tegic framework............................................................................ 72— The Russian Federation as a “Major Power” ............................... 73— Belarus: another “failed state”?.................................................... 75— Transition in Ukraine ..................................................................... 76— Moldova and its pursuit of a national identity .............................. 77— The Caucasian republics and their stagnant conflicts ................. 78— The Central Asian republics: new demands and security needs . 79Spain’s contribution to stability in eurasia ......................................... 83

Chapter IV

THE MEDITERRANEAN...................................................................... 85

The Middle East: From a Mediterranean order to a world order ....... 90— The “Iraqi issue” ........................................................................... 93— The “Palestinian issue” ................................................................. 95— Relations with Iran ........................................................................ 101The Euro-Mediterranean process....................................................... 101The Maghreb triangle (Morocco, Algeria and Western Sahara) and

Spain ............................................................................................ 103— Western Sahara ............................................................................ 103— Morocco........................................................................................ 105— Algeria ........................................................................................... 109Turkey: the Cyprus dispute and the European Union........................ 110

Chapter V

IBERO-AMERICA ............................................................................... 113

General observations ......................................................................... 115The situation in Mexico ...................................................................... 116

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Page

The situation in Central America and the Caribbean......................... 117The situation in the Andean Community............................................ 122The situation in the Mercosur countries plus Chile............................ 127Military effort....................................................................................... 132Relations with the United States and the European Union ............... 134The 12th Ibero-American summit ........................................................ 136Spain and Ibero-America ................................................................... 137Final remarks ...................................................................................... 138

Chapter VI

AFRICA............................................................................................... 141

Western presence in Africa ................................................................ 147Emigration to Spain............................................................................ 153The Monterrey summit ....................................................................... 155The Johannesburg summit................................................................. 155New organisations in Africa................................................................ 157African oil............................................................................................ 160Two wars end (for the time being) and one begins............................ 162— Angola........................................................................................... 162— Democratic Republic of the Congo (DR Congo) .......................... 165— Côte d’Ivoire ................................................................................. 168Equatorial Guinea ............................................................................... 170

Chapter VII

ASIA.................................................................................................... 173

Introduction ........................................................................................ 175North-East Asia .................................................................................. 180— China............................................................................................. 180— Taiwan ........................................................................................... 183— Japan ............................................................................................ 184— The two Koreas............................................................................. 187South-East Asia.................................................................................. 190South Asia .......................................................................................... 193— India .............................................................................................. 193— Pakistan ........................................................................................ 194— Kashmir......................................................................................... 195Conclusions........................................................................................ 196

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Page

EPILOGUE.......................................................................................... 199

COMPOSITION OF THE WORKING GROUP .................................... 219

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Page